⚡ Quick Answer
Under the old tax regime, a home loan can reduce your income tax in two main ways: interest paid on a self-occupied home can be deducted under Section 24(b) (up to ₹2 lakh a year), and the principal repaid can be claimed under Section 80C (within the overall ₹1.5 lakh limit). The new tax regime does not allow these deductions for a self-occupied home.
- Benefits depend on the tax regime you choose.
- Co-owners who are also co-borrowers may each claim their share.
- Tax rules change - confirm with a tax adviser.
A home loan is usually the biggest loan a family takes, so it is natural to ask how much of it the tax laws help with. In India, the main home loan tax benefits are on the interest you pay and the principal you repay, and there are special rules for joint loans and homes that are still under construction.
This guide explains these benefits in plain English. It reflects the rules as generally understood at the time of writing; tax laws change with each Budget, and your own situation matters, so please confirm with a chartered accountant or tax adviser before you rely on any figure.
The Main Home Loan Tax Benefits
| Section | What it covers | Limit (old regime, self-occupied home) |
|---|---|---|
| Section 24(b) | Interest paid on the home loan | Up to ₹2 lakh per year |
| Section 80C | Principal repaid, plus stamp duty and registration in the year paid | Within the overall ₹1.5 lakh 80C limit |
| Pre-construction interest | Interest paid before possession | Claimed in five equal parts from the year of possession, within the 24(b) limit |
General summary for a self-occupied home under the old tax regime. Confirm current rules with a tax adviser.
The 80C limit is shared with other investments such as provident fund and life insurance, so the real benefit depends on what else you already claim.
Old Tax Regime vs New Tax Regime
India now has two income tax regimes. The new regime has lower slab rates but removes most deductions, including Section 80C and the Section 24(b) interest deduction for a self-occupied home. The old regime keeps these deductions but has higher slab rates.
Buying an Under-Construction Home
If you buy a home that is still being built, you may pay interest on the loan before you get possession. This pre-construction interest is not claimed in the year you pay it. Instead, it is added up and claimed in five equal instalments starting from the year construction is completed, within the overall Section 24(b) limit.
L&T The Gateway Sewri is an under-construction project with possession mentioned as September 2028 – see the possession timeline explained. If you are weighing timing, read under-construction vs ready-to-move flats and our guide to the 20:80 payment plan, which affects when your loan is drawn and when interest starts.
Joint Home Loans: Double the Benefit?
When two people are both co-owners of the property and co-borrowers on the loan, each person can usually claim their own share of interest and principal in their own tax return, within their own limits. For couples where both earn, this can increase the total tax benefit for the household.
- Be a co-ownerBeing only a co-borrower, without ownership, usually does not allow the claim.
- Pay your shareEach person should actually pay their share of the EMI, ideally from their own account.
- Record the sharesOwnership shares should be clear in the agreement.
Read joint home ownership in Mumbai for the wider pros and cons of buying together.
Documents to Keep for Claims
- Annual interest and principal certificate from your lender
- Registered agreement for sale
- Stamp duty and registration receipts
- Possession letter or completion certificate (for pre-construction interest)
- Proof of EMI payments from each co-borrower
Our list of documents to buy and register a flat in Maharashtra covers the property papers in detail, and the home loan guide for premium flats explains how lenders assess your application.
A Simple Illustration
Here is a simple, hypothetical way to think about it under the old regime. Suppose a couple buys a home jointly, both are co-owners and co-borrowers, and each pays half of the EMI:
- Interest: each can claim their share of the interest paid, up to the Section 24(b) limit in their own return.
- Principal: each can claim their share of principal repaid under 80C, within their own 80C limit.
- Stamp duty and registration: can be claimed under 80C in the year paid, by the owners who paid them.
- Before possession: interest paid during construction is added up and claimed in five parts after completion.
Related Guides
- Vastu Tips When Buying a Flat in Mumbai: A Practical Guide
- Low Floor vs High Floor: Choosing the Right Floor in a Mumbai High-Rise
- Maintenance Charges, Corpus Fund and Society Formation Explained
- Joint Home Ownership in Mumbai: Buying a Flat with Your Spouse or Family
- Setting Up a Home Office in a 3 BHK, 4 BHK or 4.5 BHK
- Car Parking in Mumbai Apartments: Covered, Stilt, Podium and Mechanical
- Buying a Senior-Friendly Home for Your Parents: What to Check
- Sewri Fort and the Heritage of Sewri: A Neighbourhood Story
- What Luxury Home Buyers in Mumbai Look For Today
- Buying a flat in Mumbai as an NRI
- Home Insurance for a New Flat in Mumbai: A Simple Guide
- Upgrading from a 2 BHK to a 3 BHK or 4 BHK: When It Makes Sense
- Buying a Second Home in Mumbai: A Practical Guide
- Agreement for Sale: Key Clauses to Read Before You Sign
- Real Estate Glossary for Mumbai Home Buyers: Key Terms Explained
- Property Tax in Mumbai: A Simple Guide for Flat Owners
- Selling Your Old Flat to Buy a New One in Mumbai: Timing, Tax and Loans
- Pre-EMI vs Full EMI: Which Is Better for an Under-Construction Flat?
- Renting Out Your Flat in Mumbai: A Leave and Licence Agreement Guide
- Home Loan Eligibility: How Much Can You Borrow for a Flat in Mumbai?
Frequently Asked Questions
How much tax can I save on home loan interest?
Under the old regime, interest on a self-occupied home can be deducted up to Rs 2 lakh a year under Section 24(b). Your actual saving depends on your tax slab.
Can I claim home loan principal under 80C?
Yes, under the old regime, principal repaid can be claimed under Section 80C within the overall Rs 1.5 lakh limit shared with other investments.
Can I claim tax benefits before possession?
Interest paid before possession is claimed in five equal parts starting from the year construction is completed, within the 24(b) limit.
Do home loan benefits apply in the new tax regime?
For a self-occupied home, the new regime does not allow the 80C or 24(b) interest deduction. Compare both regimes with a tax adviser.
Can both spouses claim tax benefits on a joint home loan?
Usually yes, if both are co-owners and co-borrowers and each pays their share of the EMI. Each claims within their own limits.
Can I claim tax benefits on a second home?
Rules differ for self-occupied and let-out homes, and there are limits on combined losses. Ask a tax adviser about your situation.
Conclusion: Plan Your Loan and Your Taxes Together
Home loan tax benefits can lower the real cost of buying a home, especially for joint buyers under the old regime. Check which regime suits you, keep your certificates and receipts, and confirm the details with a tax adviser. For the payment plan and cost sheet at L&T The Gateway Sewri, enquire now or call +91 80503 63647.
L&T The Gateway, Sewri
MahaRERA No. P51900054969
Get the project details, floor plans and price sheet for 3, 4 and 4.5 BHK residences in Sewri, Mumbai. Our team will call you back.
