A home loan isn't just financing — under the right tax regime, it can meaningfully reduce your annual tax bill. Here's how the main provisions work, and where the new tax regime changes things.

Section 24(b): interest deduction

Under the old tax regime, interest paid on a home loan for a self-occupied property is deductible up to ₹2,00,000 per financial year under Section 24(b) of the Income Tax Act, against your "Income from House Property" head.

Section 80C: principal repayment

The principal portion of your EMI is eligible for deduction up to ₹1,50,000 per year under Section 80C — within the overall 80C umbrella limit that also covers PF, ELSS, life insurance and other instruments. Stamp duty and registration charges paid in the year of purchase can also be claimed within this same 80C limit.

What changes under the new tax regime

The new tax regime, now the default option for most taxpayers, generally does not allow these interest and principal deductions for a self-occupied property. If you choose the new regime, you lose Section 24(b) and 80C home loan benefits on your own residence — though interest on a loan for a let-out (rented) property remains deductible against rental income, with no upper cap, and any resulting loss can offset other income. Whether the old or new regime works out better depends on your full income and deduction profile — this is worth running past a chartered accountant before you file.

Joint ownership can double your benefit

If you and a co-borrower (commonly a spouse) jointly own and jointly service the loan, each of you can separately claim Section 24(b) and 80C deductions on your individual tax returns — potentially unlocking a combined household deduction of up to roughly ₹7 lakh under the old regime, subject to your respective loan shares and taxable income.

First-time buyer provisions

Additional deductions under Sections 80EE and 80EEA have existed for first-time buyers in the past, but both carry specific eligibility windows tied to the loan sanction date and property value — many buyers are no longer eligible depending on when their loan was sanctioned. Confirm current eligibility with your lender or CA rather than assuming these apply.