Home Loan Tax Benefits for 2025

Section 80C – Tax Deductions on Principal Repayment

1. Deduction amount:When claiming principal repayment deductions, Rs.1,50,000 is the maximum limit – under the overall limit of the various Section 80C deductions that are available.
2. Deduction eligibility: For this deduction to be made, the claimant must satisfy the following eligibility criteria:
   1. The purpose of the home loan must be for the purchase or construction of a new house property.
   2. From the date of possession, the property should not be sold for a minimum of 5 years.
   3. If the property has been sold within 5 years from the date of possession, the deductions will be added back to your income in the year of sale.
3. Charges:Under Section 80C, claims for a maximum deduction amount of up to Rs.1,50,000 can be made also for and including the charges for:
   1. Stamp duty.
   2. Registration.
   3. Transfer related expenses

Section 80EE – Tax Deductions for first-time Home Owners

1. Deduction amount:A total deduction amount of Rs.1,00,000 can be claimed under Section 80EE, but this only applies for first-time homeowners.
2. Deduction eligibility: In order to make a claim under Section 80EE, the claimant must meet the following criteria:
   1. Must be a first-time home owner.
   2. The total value of the home loan must not be more than Rs.25,00,000.
   3. The total value of the property must not be more than Rs.40,00,000.
   4. The loan should have been sanctioned any time between the 1^st of April, 2013 and the 31^st of March, 2014.
   5. Claimant cannot own any other house property on the date of loan sanctioning.
   6. This amount under Section 80EE can be claimed by resident Indians and NRIs as well.
3. This deduction can be claimed over FY2013-14, and FY2014-15.

How to claim Tax Deductions on Home Loans?

If you’re a salaried employee, you need to submit the home loan interest certificate to the company that employs you, and instruct them to adjust the tax deductions as necessary. The home loan interest certificate is a document that has information relating to your EMI interest and principal components, borrower details, and ownership share.

If you’re self-employed, just calculate your quarterly liability for advance tax. It’s very beneficial to do this and keep your documents on hand in case questions arise from the Income Tax Department.

Tax Deductions on Home Loans in the case of joint owners of Property

If you jointly own a property with, say, your spouse, after jointly applying for a home loan, you can claim deductions on interest under Section 24 for up to Rs.2,00,000 each.

Under Section 80C for Principal component repayment and deductions on the same, each co-applicant can claim up to Rs.1,50,000. Bear in mind that this is the total Section 80C deduction, including all other deductions, if any, claimed under this Section.

The important points to note here are:

1. Deductions can only be claimed in the same ratio as that of the shares of ownership in the house property.
2. If the loan has been applied for jointly, but there is no joint ownership of property, there are no income tax deductions that can be claimed by you.
3. All income tax deductions can only be claimed once the property has been fully constructed.
4. In case the co-borrower does not contribute to EMI payments, the entire interest can be claimed as a deduction in the Income Tax Return by the one paying off the EMI.

How much is the Maximum Tax Deductible for a Home Loan?

The maximum tax deductible for a home loan is as follows:

1. Up to Rs.1.5 lakh under section 80C of Income Tax Act.
2. Up to Rs. 1.5 lakh under section 80EEA for first time home owners.
3. Up to Rs.2 lakh under section 24 for self-occupied houses.

Can Tax-Deductions be Availed on top-up Loan?

The tax deductions on home loan top-up can be availed only in case of:

1. Construction/acquisition of a residential property.
2. Repair/renovation of such property.

Can Home Loan Tax Benefits be Claimed on under-construction Property?

Yes, home loan tax-benefits be claimed on under-construction property if:

1. A deduction of Rs.2 lakh is applicable if the construction is completed within five years.
2. A deduction of only up to Rs.30,000 is applicable if the construction is not completed within five years.

How much is the maximum tax deductible for a home loan?

The maximum tax deductible for a home loan is as follows:

1. Up to Rs.1.5 lakh under section 80C of Income Tax Act.
2. Up to Rs. 1.5 lakh under section 80EEA for first time home owners.
3. Up to Rs.2 lakh under section 24 for self-occupied houses.

Can tax-deductions be availed on top-up loan?

The tax deductions on home loan top-up can be availed only in case of:

1. Construction/acquisition of a residential property.

1. Repair/renovation of such property.

Can home loan tax benefits be claimed on under-construction property?

Yes, home loan tax-benefits be claimed on under-construction property if:

• A deduction of Rs.2 lakh is applicable if the construction is completed within five years.
• A deduction of only up to Rs.30,000 is applicable if the construction is not completed within five years.