Home Loan Tax Benefit Calculator

What you can actually claim on a home loan

A home loan gives three separate deductions, and they are claimed under different provisions with different limits. Two of them are unavailable if you are on the new regime, which is the default.

What	Limit	Provision (from 1 Apr 2026)	Old Act
Interest — self-occupied	₹2,00,000	s.22(2)(a)	proviso to s.24(b)
Interest — let out	no cap on the deduction itself	s.22(1)(b)	s.24(b)
Principal repayment	₹1,50,000 shared with all other Schedule XV items	s.123 + Schedule XV	s.80C
Additional interest — loan sanctioned 2016-17	₹50,000	s.130	s.80EE
Additional interest — loan sanctioned Apr 2019 to Mar 2022	₹1,50,000	s.131	s.80EEA
Standard deduction on rent	30% of annual value	s.22(1)(a)	s.24(a)

The regime decides most of it

This is the single thing most home-loan calculators get wrong, and it changes the answer completely.

• New regime (the default): the ₹1,50,000 principal deduction and the ₹2,00,000 self-occupied interest deduction are not available. Interest on a let-out property is still deductible against that property’s income.
• Old regime: all of the above are available, if you meet each provision’s conditions.

So for a self-occupied house on the new regime, the honest answer is usually that the loan produces no tax benefit at all. A calculator that shows you a saving without asking which regime you are on is showing you the old-regime number.

Self-occupied or let out — two different rules

Self-occupied. Interest is capped at ₹2,00,000 under s.22(2)(a), and only if the acquisition or construction was completed within five years of the end of the year the money was borrowed, and you hold a certificate from the lender. Miss either condition and s.22(2)(b) caps it at ₹30,000 — a detail that costs ₹1,70,000 of deduction and is rarely mentioned.

Let out. The full interest is deductible against rental income under s.22(1)(b). What is capped is not the deduction but the loss you can set off against other heads of income, which remains ₹2,00,000 a year; the rest carries forward.

Interest paid before you moved in

Interest for the period before the year of acquisition or construction is not lost. Under s.22(1)(c) it is allowed in five equal instalments, starting with the year the property is acquired or constructed. For a self-occupied house those instalments still sit inside the same ₹2,00,000 ceiling, so if your current interest already reaches the cap the pre-construction instalment adds nothing that year.

Joint home loans

Each co-borrower claims separately, so the limits apply per person rather than per loan — two borrowers can claim up to ₹2,00,000 each on interest and ₹1,50,000 each on principal. Two conditions are easy to miss: each must be a co-owner of the property, not merely a co-signer of the loan, and each can claim only in proportion to the share actually paid.

Under-construction property

No deduction is available while the property is under construction. The interest accumulates and enters the five-instalment treatment in s.22(1)(c) once construction completes. The five-year completion condition in s.22(2)(a) is what turns a delayed project into a ₹30,000 cap, so a long-running construction is the case where this matters most.

A worked example

Self-occupied house, old regime, ₹5,00,000 interest and ₹2,00,000 principal paid in the year, taxpayer in the 30% bracket:

• Interest allowed: ₹2,00,000 — capped by s.22(2)(a), not the ₹5,00,000 actually paid
• Principal allowed: ₹1,50,000 — capped by s.123, and shared with EPF, PPF, life insurance and the rest of Schedule XV, so if those already fill it the loan adds nothing
• Total deduction ₹3,50,000; tax saved at 30% plus cess: about ₹1,09,200

On the new regime the same loan saves nothing, because neither deduction is available for a self-occupied property.

Frequently Asked Questions