Home Loan Tax Benefits 2026-27
Section 80C (now Sec 123), 24(b), pre-construction interest, joint loans and let-out property — old vs new regime.
Updated 30 September 2026 · 17 lenders trackedWhat you need to know
Home loan tax benefits are available only under the old tax regime. From tax year 2026-27 the Income-tax Act, 2025 replaces the 1961 Act; the principal deduction formerly under Sec 80C continues within the ₹1.5 lakh limit under Section 123, and the house-property interest deduction continues with the same limits. Under the default new regime there is no deduction for a self-occupied home.
Old vs new regime
| Benefit | Old regime | New regime |
|---|---|---|
| Principal repayment (incl. stamp duty & registration in the year paid) | Up to ₹1.5 lakh within Sec 80C (Sec 123 of the Income-tax Act, 2025 from tax year 2026-27) | Not available |
| Interest — self-occupied home | Up to ₹2 lakh a year (₹30,000 if construction not completed within 5 years, or for repair loans) | Not available |
| Interest — let-out home | Full interest against rent; net house-property loss set off against other income up to ₹2 lakh, rest carried forward 8 years | Deductible against that property’s rent; loss cannot be set off against other income |
| Pre-construction interest | In 5 equal instalments from the year construction is completed (within the limits above) | For let-out property, against its rent |
| Sec 80EE / 80EEA (first-home extra interest) | Only for loans sanctioned by 31 Mar 2017 / 31 Mar 2022 — closed to new loans | Not available |
Co-owners who are also co-borrowers can each claim these limits on their share. If the house is sold within 5 years of the end of the year of possession, 80C deductions already claimed are added back to income.
Key conditions
- Interest cap ₹2 lakh applies if the house is acquired or constructed within 5 years from the end of the year the loan was taken; otherwise ₹30,000.
- Pre-construction interest (up to the year before completion) is claimed in 5 equal instalments starting the year construction is completed, within the annual limit.
- Stamp duty and registration qualify under the ₹1.5 lakh principal limit in the year paid.
- Selling within 5 years from the end of the year of possession reverses 80C deductions already claimed.
- Loans from relatives or friends: interest (not principal) deductible with a certificate from the lender.
Joint home loans
Up to ₹1.5 lakh principal and ₹2 lakh interest each, if also a co-owner and paying EMIs.
Ownership share, repayment from own account, lender’s certificate showing split.
A co-borrower on the new regime gets no deduction for a self-occupied home.
Up to two houses can be treated as self-occupied; the ₹2 lakh interest cap is combined.
Frequently asked questions
Is 80EEA still available?
No. Sec 80EEA (extra ₹1.5 lakh interest for affordable first homes) applied only to loans sanctioned up to 31 March 2022.
Should I choose the old regime for home loan benefits?
Only if your total old-regime deductions (80C, 24(b), HRA, etc.) exceed the benefit of the new regime’s lower slabs. Compare both each year.
Can I claim HRA and home loan interest together?
Yes, under the old regime, if you live in a rented house in a different city from your own home, or have valid reasons in the same city.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.