Updated 2026-07-11

Home Loan Tax Benefit: Old vs New Regime

On ₹20 lakh salary, the worked old-regime case claims ₹1.5 lakh under 80C and ₹2 lakh under Section 24(b). It pays ₹3,04,200, compared with ₹1,92,400 in the new regime.

Old-regime saving in this case

₹-1,11,800

The principal shares the 80C limit; the interest input is capped at ₹2 lakh for this self-occupied example.

What the calculator includes

Principal repayment can qualify within the combined Section 80C cap. Interest on borrowed capital for a self-occupied house can qualify under Section 24(b), subject to its conditions and limit.

Regime Home-loan inputs used Taxable income Total tax
NewNone₹19,25,000₹1,92,400
Old₹1.5L principal + ₹2L interest₹16,00,000₹3,04,200

Do not count the EMI twice

An EMI contains principal and interest. Use the lender certificate to separate them. The principal goes into the shared 80C bucket, while eligible interest follows the house-property rules.

A tax saving does not make an unaffordable loan cheap. Compare the tax reduction with interest paid, transaction costs and the cash needed for the purchase.

Check the official rules

Tax rules depend on the financial year and the facts of your return. Verify the current provisions on the Income Tax Department portal before filing.

Frequently Asked Questions

Is home-loan interest deductible in the new regime?
The self-occupied Section 24(b) interest deduction used here is not available under the new regime. Let-out property rules need a separate calculation.
Is principal repayment separate from the 80C cap?
No. Eligible principal repayment shares the combined ₹1.5 lakh Section 80C limit.
Can a joint loan double the benefit?
Each co-owner who is also a co-borrower may claim their eligible share, subject to ownership, payment and statutory conditions. It is not an automatic double deduction.
Try it yourself → Income Tax Calculator

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Written by Amir Khan, a contributor to RupeeReality: free financial calculators for Indian investors. All calculations use standard financial formulas cross-referenced against established platforms. Numbers updated for FY 2026-27. Not financial advice.