Price, loans & investment · · 4 min read · By Sorrel Buildcon
Home Loan Tax Benefit 80C and 24B: How Much Can You Save?
Quick answer
The home loan tax benefit 80C and 24B works like this under the old tax regime: principal repaid qualifies under Section 80C up to ₹1.5 lakh a year (within the overall 80C limit), and interest on a self-occupied home is deductible under Section 24(b) up to ₹2 lakh a year. The new regime does not allow these for a self-occupied home. Check current rules with a tax advisor.
Home loan tax benefit 80C and 24B at a glance
| Item | Section 80C | Section 24(b) |
|---|---|---|
| What it covers | Principal repaid, plus stamp duty and registration in the year paid | Interest on the home loan |
| Annual limit | ₹1.5 lakh (shared with PF, PPF, ELSS, insurance etc.) | ₹2 lakh for self-occupied home |
| Available in new regime? | No | No for self-occupied; interest on let-out property is allowed against rent |
| When it starts | After construction is complete | After completion; earlier interest in 5 instalments |
These are general rules for individuals. A new Income-tax Act, 2025 applies from 1 April 2026 and renumbers many sections; buyers and advisors still widely refer to the familiar 80C and 24(b) names. Check current rules with a tax advisor before you file.
Worked example: ₹50 lakh loan
Take a ₹50 lakh loan at an illustrative 8.5% p.a. for 20 years (EMI about ₹43,391). In the first full year, about ₹4.21 lakh of your EMIs is interest and about ₹99,500 is principal.
- Section 24(b): interest of ₹4.21 lakh, but the deduction is capped at ₹2 lakh.
- Section 80C: principal of about ₹99,500, if you have room in your ₹1.5 lakh limit.
- In the 30% slab, ₹2 lakh of interest deduction saves about ₹62,400 of tax including 4% cess.
Illustrative only — your actual saving depends on your slab, other deductions and the regime you choose.
Joint loans can double the benefit
If a husband and wife are both co-owners and co-borrowers and both pay the EMI, each can claim up to ₹2 lakh of interest and up to ₹1.5 lakh under 80C on their share. In the example above, a 50:50 split gives each person about ₹2.1 lakh of interest — so together they can claim ₹4 lakh instead of ₹2 lakh. Read joint ownership home benefits and buying a home as a woman in UP.
Interest paid during construction
For an under-construction flat, no deduction is available while the building is being built. Interest paid before the year of completion (pre-construction interest) is added up and claimed in five equal instalments starting from the year construction is completed — and it counts within the same ₹2 lakh yearly cap. If construction is not completed within five years from the end of the financial year in which the loan was taken, the self-occupied interest cap can fall to ₹30,000. This is one reason to understand pre EMI vs full EMI before you choose.
Old regime or new regime?
The new regime is the default and has lower slab rates but no deduction for a self-occupied home loan. The old regime allows 80C, 24(b) and many other deductions. If your interest and 80C claims are large — typical in the first years of a big home loan — the old regime may leave you better off. Salaried taxpayers can usually choose each year; business income has stricter switching rules. Run both calculations or ask a tax advisor.
Rules that catch people out
- Selling within five years: if you sell the house within five years from the end of the financial year of possession, 80C deductions already claimed are reversed and taxed.
- Loan from a relative: interest may qualify under 24(b), but principal does not qualify under 80C unless the loan is from a specified lender such as a bank or housing finance company.
- Let-out homes: interest is deductible without the ₹2 lakh cap, but the loss you can set off against other income in a year is limited to ₹2 lakh under the old regime.
- Documents: keep the bank's provisional and final interest certificates and the possession letter.
How this fits your home budget
Tax savings are a bonus, not a reason to over-borrow. Plan your EMI first with EMI planning for a new flat and salary required for a 50 lakh home loan. At Sorrel Heights, Greater Noida West, the 2BHK + Study is indicatively under ₹50 lakh and the 3BHK homes indicatively ₹60–70 lakh, as shared by Sorrel Buildcon and revised from time to time.
Next step
Get the current cost sheet from price list & payment plan, understand the booking buying process, and book a site visit. Keep your tax advisor in the loop when you sign the loan papers.
Facts about Sorrel Heights on this page come from the official brochure and Sorrel Buildcon. General guidance is for information only — confirm rules and rates with the relevant authority before you act.