For homeowners filing their Income Tax return for FY 2024–25, understanding the available tax benefits is crucial for reducing your overall tax liability. Especially under the old tax regime, there are several smart strategies to maximise your home loan tax benefits and save significantly.
Let’s break down the top five home loans-related tax advantages every eligible taxpayer should consider while filing their ITR for FY 2024–25.
1. Deduction on Principal Repayment – Section 80C
Under Section 80C, you can claim a deduction of up to ₹1.5 lakh per annum for the principal portion of your home loan EMIs. This also includes stamp duty and registration charges, provided these are paid in the same financial year.
Do note:
- The property must not be sold within five years of possession.
- This benefit is available only after possession is obtained.
2. Interest Deduction on Home Loan – Section 24(b)
Interest on your home loan is tax deductible up to ₹2 lakh every year under Section 24(b) if the house is self-occupied. For let-out properties, there is no limit on the interest amount, but the deduction is capped at ₹2 lakh when offset against other income.
Also, from FY 2025 onwards, taxpayers can treat two properties as self-occupied, making this benefit even more valuable."
Also Read: ITR-3 Filing Simplified: From Chaos to Clicks in 10 Minutes
3. Additional Deduction for First-Time Buyers – Section 80EE & 80EEA
- Under Section 80EE, if your home loan was sanctioned in FY 2016–17, you may be eligible for an additional ₹50,000 deduction on interest paid.
- Under Section 80EEA, for loans taken between April 2019 & March 2022, you may claim up to ₹1.5 lakh if the property value is within ₹45 lakh.
⚠️ You can claim either Section 80EE or 80EEA, not both.
4. Benefit for Joint Home Loan Holders
If you jointly own a property and are co-borrowers on the home loan, each co-owner can claim:
- Up to ₹1.5 lakh on principal under Section 80C
- Up to ₹2 lakh on interest under Section 24(b)
This effectively doubles your deduction limit & enhances total tax benefits.
5. Capital Gains Exemption – Section 54
Selling a house and buying another? You may claim capital gains exemption under Section 54 if:
- You reinvest the long-term gains in purchasing or constructing another residential property in India.
- The new house must be bought within 1 year before or 2 years after the sale, or constructed within 3 years.
Even if the new house is bought using a home loan, you can still avail this benefit in addition to the above-mentioned deductions."
Also Read: Deduction Under New Tax Regime: What You Can (and Can’t) Claim in FY 2024–25
Pro Tips for Filing ITR for FY 2024–25
- Keep all loan documents & interest certificates
- File your ITR for FY 2024–25 under the old tax regime to avail these benefits.
- Plan early in the financial year to utilise all deduction limits optimally.
Remember, the new tax regime does not allow most of these tax benefits, so those with large home loans and eligible deductions may find the old tax regime more rewarding.
Conclusion
With smart planning, taxpayers can save up to ₹3 lakh or more using just home loan-related deductions. These tax benefits not only reduce your tax burden but also make long-term financial planning easier.
So this financial year, while filing your Income Tax return, don’t forget to explore all five of these powerful tools to maximise your home loan tax benefits under the old tax regime.
