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Home Loan Interest Deduction — Section 24(b) Complete Guide

Updated: 3 June 2026  |  Income-tax Act 2025  |  Section 24(b)

Section 24(b): home loan interest deduction up to ₹2,00,000/year for self-occupied property (old regime only). No limit for let-out property (available in both regimes). Pre-EMI interest deductible in 5 equal installments after possession. Joint loan: both co-owners claim separately.
₹2,00,000
Maximum interest deduction for self-occupied home — under Section 24(b), old regime only.
Let-out property: unlimited deduction (both regimes). New regime: Section 24(b) not available for self-occupied. Also claim ₹1.5L principal under Section 80C (old regime).

Section 24(b) — Deduction by Property Type and Regime

Property TypeOld Regime LimitNew RegimeCondition
Self-occupied property₹2,00,000/yearNot availableConstruction within 5 years
Let-out (rented) propertyNo limitNo limit (available)Actual interest paid
Deemed let-out (2nd+ property)No limitNo limit (available)Notional rent calculated
Pre-construction (pre-EMI) interest5 equal installmentsLet-out: availableFrom year of possession
Construction not completed in 5 years₹30,000 onlyNot availableDelayed construction penalty

Home Loan Tax Benefits — Complete Picture

ComponentSectionLimitRegime
Principal repayment80C₹1.5L (combined with other 80C)Old regime only
Interest — self-occupied24(b)₹2L/yearOld regime only
Interest — let-out24(b)No limitBoth regimes
First-time buyer (80EEA)80EEAExtra ₹1.5L interestOld regime only (loan Apr19–Mar22)
Stamp duty/registration80CWithin ₹1.5L overall limitOld regime only

Frequently Asked Questions

What is the home loan interest deduction under Section 24(b)?
Section 24(b) of Income-tax Act 2025 allows deduction of home loan interest: Self-occupied property: Maximum ₹2,00,000 per year. This ₹2L limit applies even if you have 2 self-occupied properties (combined limit). Let-out (rented) property: No upper limit — entire interest paid is deductible. Conditions: loan must be for purchase/construction/renovation of property. Construction must be completed within 5 years from end of FY of borrowing. Pre-EMI interest: deductible in 5 equal annual installments from year of possession. Important: New regime — Section 24(b) NOT available for self-occupied property; available for let-out property.
Is home loan interest deduction available in the new tax regime?
New regime and Section 24(b): Self-occupied property: Section 24(b) interest deduction is NOT available in the new regime (₹2L deduction foregone). Let-out property: Section 24(b) interest IS available in new regime (no limit) — because it reduces the "Income from House Property" head, not a Chapter VIA deduction. Impact: if you have a large home loan on self-occupied house, old regime may be better (saves up to ₹2L × 30% = ₹60,000 in tax). Trade-off: new regime has lower slab rates — calculate total tax both ways. Section 80EEA (first-time buyer additional ₹1.5L): ONLY old regime, NOT available in new regime.
What is the deduction for under-construction property?
Pre-EMI interest (under-construction property): Interest paid during the construction period (before possession) is called pre-EMI interest or pre-construction interest. This is NOT deductible in the year it is paid. Treatment: accumulated pre-EMI interest is deductible in 5 equal installments starting from the year of possession. Example: Construction period 3 years, total pre-EMI interest = ₹6L. From year of possession: ₹1.2L per year for 5 years (as installment) PLUS current year interest. Limit: still subject to ₹2L cap for self-occupied. For let-out: no limit even on installment portion. Construction period: must complete within 5 years or limit drops to ₹30,000.
Can I claim deduction on both principal and interest?
Yes — home loan gives TWO deductions: (1) Principal repayment: Section 80C — up to ₹1.5L combined with other 80C investments (PPF, ELSS, etc.). Old regime only. New regime: Section 80C NOT available. (2) Interest payment: Section 24(b) — ₹2L for self-occupied (old regime); unlimited for let-out (both regimes). Additional: Section 80EEA (first-time buyer, loan sanctioned April 2019–March 2022): extra ₹1.5L on interest. Only old regime. Total potential deduction (old regime): ₹1.5L (80C principal) + ₹2L (24(b) interest) + ₹1.5L (80EEA if eligible) = ₹5L deduction from taxable income.
What if I have a joint home loan?
Joint home loan tax benefits: Both co-borrowers can separately claim Section 24(b) and 80C deductions. Condition: both must be co-owners of the property AND co-borrowers of the loan. Each co-owner can claim: ₹2L interest under 24(b) individually (total ₹4L for the couple). ₹1.5L principal under 80C individually (total ₹3L). So a husband-wife joint loan on ₹1Cr property: each claims ₹2L interest + ₹1.5L principal = ₹3.5L deduction each. But: proportion of claim should match ownership ratio. If wife is not co-owner, she cannot claim deductions even if co-borrower. This is a major tax planning opportunity for couples.

Related Pages

Home Loan Tax Benefit Section 24 Section 80EEA House Property Income Old vs New Regime
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