If you’re repaying a home loan in FY 2025-26, you’re not just building a future—you’re also eligible for major tax savings. With the right mix of sections under the Income Tax Act, salaried and self-employed individuals can legally reduce their tax burden by up to ₹3.5 lakh every year. Here’s how the benefits stack up, and how to claim them.

Section 80C: Principal Repayment

• Deduction Limit: ₹1.5 lakh annually
• Covered Expenses: EMI principal + Stamp duty + Registration fees
• Critical Condition: Property must be held for ≥5 years post-possession to avoid reversal

Section 24(b): Interest Deduction

Additional Deductions You Should Know:

Section 80EE

• Benefit: Additional ₹50,000 interest deduction
• Eligibility:
  • First-time buyer
  • Loan sanctioned (Apr 2016-Mar 2017)
  • Property value ≤ ₹50 lakh

Section 80EEA

• Benefit: Extra ₹1.5 lakh interest deduction
• Qualifiers:
  • Affordable housing (property ≤ ₹45 lakh)
  • Loan sanctioned (Apr 2019-Mar 2022)
  • No other residential ownership

Note: Sections 24(b), 80EE, and 80EEA can be combined if criteria are met.

Also Read:- How to File ITR Online for Salaried Employees Before Deadline! – AY 2025–26 Guide

Advanced Tax Strategies

Joint Home Loans

• Co-owners can claim separate deductions (e.g., ₹1.5L 80C + ₹2L 24(b) each)
• Requires proportional ownership and EMI contribution

Second Property Taxation

Set-off Limitation: ₹2 lakh annual loss against other income

Tax Benefit for Second Home

You can also claim tax benefits on a second property. If both homes are self-occupied, the total interest deduction remains capped at ₹2 lakh. If the second house is rented, the entire interest is deductible, but only ₹2 lakh of the loss can be set off against other income in a year.

Old vs New Tax Regime

Remember, these deductions are applicable only if you choose the old tax regime. The new regime offers lower tax slabs but doesn’t allow exemptions under Sections 80C, 24(b), 80EE, or 80EEA. For home loan holders, the old regime may be more beneficial, especially if you’re paying high EMIs.

Also Read: Filing ITR in 2025? Old vs. New Tax Regime: Don’t File Your ITR Without Reading This

How to Claim These Benefits

• Collect your interest certificate from your bank
• Submit it to your employer for TDS calculation or claim while filing ITR
• Keep loan sanction letters and possession proof handy

With thoughtful planning, your home loan can save you far more than you think. By understanding which deductions apply to your situation, you can reduce your tax outgo substantially while creating a valuable long-term asset.