Home Loan Tax Benefits in 2026: Old vs New Tax Regime

Home-loan tax benefits in 2026

Benefits depend on whether the property is self-occupied or let out, construction status, ownership, actual repayment and the chosen tax regime. A loan does not automatically create a deduction.

Old tax regime

For eligible taxpayers, section 24(b) can allow interest deduction from house-property income. The Income Tax Department’s AY 2026-27 guidance shows a ₹2 lakh ceiling for eligible interest on a self-occupied property, subject to conditions. Eligible principal repayment can fall within the aggregate section 80C limit of ₹1.5 lakh, alongside other qualifying items and conditions.

New tax regime

Section 80C deductions are generally not available. Interest treatment differs by property use; do not assume the self-occupied benefit available under the old regime. Compare the total tax outcome, not the home-loan deduction alone.

Joint loan claims

Each claimant should satisfy ownership and actual repayment conditions. Keep the deed, loan certificate and bank evidence. A co-borrower who is not an owner should not automatically claim a property deduction.

Construction and possession

Completion timing and pre-construction interest rules can affect when deductions begin. Delays can change the result. Obtain the lender’s annual interest certificate but reconcile it with tax-law eligibility.

Before claiming

• Confirm ownership share and property use.
• Confirm old versus new regime for the year.
• Separate principal, interest and fees.
• Check completion and possession documents.
• Use current return forms and official guidance.

Official source

Income Tax Department — salaried individuals, AY 2026-27. Tax reviewer: [Name and credentials]. Last reviewed 27 September 2026.