5 Powerful Tax Benefits On Home Loan: Just Do This While Filing ITR

Purchasing a home is not only a thrilling experience with some tax benefits. When completing your ITR under the old regime, your home loan could significantly reduce your own taxes. Here are five tax benefits on home loans which you may be eligible to claim when you file your ITR for the FY 2024–25:

1. Deduction in interest under section 24(b)

If you occupy the house, then you can claim ₹2 lakh interest payable on the loan in any one accounting year. If the house is let out, then you can claim interest at the full value of the loan. You can only set off the ₹2 lakh loss against other income in that accounting year.

You can carry forward the balance of the loss for a maximum of 8 years. The tax benefit derived from a home loan gives contribution to treat two houses as self-occupied. This gives you an additional dimension of tax planning flexibility at your disposal.

2. Principal repayment under section 80C

You can make a claim of up to ₹1.5 lakh per year for making repayments on the loan principal. This limit extends to stamp duty and registration fees to obtain the home loan. You must own the property and retain ownership for 5 years to claim the deduction!

3. Additional deduction for first time buyers

If you took the loan in FY 2016-17, you can now claim an additional ₹50,000 under section 80EE. In addition, if you bought that affordable home between April 2019 to March 2022, you can claim an additional amount under section 80EEA, up to a maximum of ₹1.5 lakh. You cannot claim under section 80EE and 80EEA at the same time.

4. Save Capital Gains Tax Under Section 54

Did you sell your house with a profit? Use that money to buy or build another home anywhere in India. You can buy a new home within 1 year before or 2 years after selling the existing one. You can also build a new home within 3 years. If you take a loan for your new home, you can claim the deductions just like normal.

5. Double Tax Benefits With Joint Loans

Obtain a joint loan with a co-owner such as your spouse. You can both claim a tax deduction under Section 80C and 24(b) as separate taxpayers. You can double tax benefits but still save money on a bigger home with a joint loan.

Also Read: Get ₹5 Lakh Loan Instantly Using Just Your PAN Card In Minutes

Important Reminder
These claims will only apply under the old tax regime. There would be advantages using the old tax regime, especially if you have a large home loan. Ensure you keep the bank statement, loan papers and interest certificates handy when completing your ITR for AY 2025-26.