Home Loan Tax Benefit Calculator (Section 24b & 80C)

How it works

Tax saved = [min(₹2,00,000, interest) + min(80C room, principal)] × marginal rate × 1.04 cess, per co-borrower (old regime only for self-occupied)

Under the old tax regime a home loan on a self-occupied house gives two deductions: interest up to ₹2 lakh a year under Section 24(b) and principal repayment (plus stamp duty and registration in the year paid) within the ₹1.5 lakh Section 80C basket. Because early EMIs are mostly interest, big loans blow past the ₹2 lakh cap — a joint loan with a co-owning spouse lets each borrower claim ₹2 lakh, doubling the benefit. For a let-out property the full interest is deductible against rent, but the resulting loss that can be set off against salary is capped at ₹2 lakh. The new regime removes the 24(b) deduction for self-occupied homes and the whole 80C basket, which is a major reason high-interest borrowers still prefer the old regime.

Worked example

₹60 lakh at 8.5% over 20 years: EMI ₹52,069; year-one interest about ₹5,05,000 and principal ₹1,20,000. Single borrower at 30%: ₹2,00,000 + ₹90,000 (80C room) = ₹2,90,000 deduction → ₹90,480 saved. Two co-borrowers: about ₹1,62,000 saved.

Frequently asked questions