There’s a lot that goes into buying your own home. Owning a home brings a feeling of pride- that cannot be felt for a rented apartment, for which you would pay exorbitant maintenance fees, but a space that you’ve worked hard for, and where you’d like your children to grow up in.
For most people, being a homeowner is a dream that is accomplished only through a home loan. But getting one is another process that can seem daunting and tedious. With a home loan comes EMIs for 15 to 20 years that you will need to plan for.
The silver lining is that the government actually gives you something back. If you’re paying a home loan, you’re entitled to home loan tax benefits under two key sections: 80C and 24(b). This blog will explore how.
Understanding EMI & Interest
Every EMI has two parts:
- Principal – This is the core loan amount you’re slowly reducing.
- Interest – The cost you’re paying to the bank for lending you the money.
Now here’s the good part – you can claim tax benefits on both.
Section 80C: Principal Repayment Benefits
This one is the most commonly used section for tax-saving. Under 80C, you can claim up to INR 1.5 lakh a year for:
- The principal part of your EMI
- Stamp duty
- Registration charges
- Savings such as PPF, ELSS, and LIC
In case you bought a house and paid stamp duty during the same year, that is eligible for the tax benefit, and the combined limit will be INR 1.5 lakh.
But there’s an important condition: You must not sell the property for at least 5 years after taking possession. If you do, the deduction is reversed and added back to your taxable income.
Section 24(b): Interest Deduction Explained
This one’s lesser-known but often more valuable.
Under Section 24(b), you can claim up to INR 2 lakh per year as a deduction on the interest portion of your EMI, as long as:
- The home is self-occupied
- The construction is completed within 5 years
If the house is still under construction or the possession is delayed beyond 5 years, the deduction drops to just INR 30,000.
What if it’s rented?
There’s no upper cap on interest if the house is let out. But still, your overall set-off under “income from house property” is limited to INR 2 lakh per year. The balance interest can be carried forward for 8 years.
Additional Deductions: Section 80EE & 80EEA
If this is your first home, and the property value is below a certain limit, you might qualify for more:
- Section 80EE: Extra deduction of ₹50,000 on interest (for loans sanctioned between April 2016 to March 2017)
- Section 80EEA: Extra ₹1.5 lakh deduction (for homes valued up to ₹45 lakh, and loan sanctioned between April 2019 and March 2022)
These are over and above the ₹2 lakh under 24(b). But only one of these can be claimed, not both.
How Much Can You Save Annually?
80C gives the benefit of INR 1.5 lakh deduction on the principal amount and stamp duty.
24(b) provides INR 2 lakh relief on EMI interest if the house is self-occupied.
80EE / 80EEA provides a deduction of INR 50,000 – 1 lakh on the EMI interest for first-time buyers- bringing the total potential savings up to ₹5 lakh (depending on your bracket and eligibility)
Smart Planning vs. Just Saving Tax
Don’t buy a house just to “save tax.” It rarely works out.
Get a home loan because you’re financially ready, not because a bank is offering a 90% LTV. Make sure your emergency fund stays untouched. Because no tax benefit will help when there’s a sudden repair, a job shift, or a family medical need.
A home is more than an investment — it’s often your family’s most emotional anchor. And it’s built, not just with cement and steel, but with years of planning, dreams, and quiet sacrifice.
If Section 80C and 24(b) make your financial journey smoother, use them well. But don’t chase benefits blindly. Plan slowly, build wisely.
Just like JK Cement’s legacy — strong, enduring, dependable — your home too should stand on a foundation of care and clarity.
FAQs
1. Can husband and wife both claim the benefit?
Yes — if both are co-borrowers and co-owners. The tax benefit can be split in proportion to your ownership and EMI contribution.
2. What if the house is still being built?
Interest paid during construction can’t be claimed right away. But it gets added up and split into five equal parts, starting the year you get possession.
3. What about a second home?
Whether it’s rented or vacant, you can still claim interest deduction — but the overall loss under house property can’t exceed ₹2 lakh in a year.
Yes — if both are co-borrowers and co-owners. The tax benefit can be split in proportion to your ownership and EMI contribution.
Interest paid during construction can’t be claimed right away. But it gets added up and split into five equal parts, starting the year you get possession.
Whether it’s rented or vacant, you can still claim interest deduction — but the overall loss under house property can’t exceed ₹2 lakh in a year.
