Section 24(b): Home-Loan Interest Deduction Explained

By the MyTaxLocker Team · Updated 11 June 2026

If you have a home loan, the interest you pay is deductible under Section 24(b). At the same time, the principal is deductible under Section 80C. The amount you can claim depends on whether the home is self-occupied or let out.

Self-occupied home

For a house you live in, you can deduct home loan interest up to ₹2,00,000 per year under the Old regime. There's no deduction for principal here under 24(b) — principal repayment is claimed separately under Section 80C.

Let-out (rented) property

For a property you rent out, the full interest is deductible against the rental income. If that produces a loss under "income from house property", the loss you can set off against your other income in the same year is capped at ₹2,00,000. Any remaining loss can be carried forward for up to eight years.

Pre-construction interest

Interest paid before the property is completed isn't lost — it can be claimed in five equal annual installments starting from the year construction is completed, within the applicable limits.

How the New regime treats it

Under the New regime, the interest deduction for a self-occupied house is generally unavailable, and the set-off of house property loss against other income is restricted. For many home-loan borrowers, this single difference is what makes the Old regime worth a closer look.

Extra deductions for first-time buyers: 80EE & 80EEA

Over and above Section 24(b), two provisions have offered additional home-loan interest deductions to first-time buyers under the Old regime — Section 80EE and, for affordable housing, Section 80EEA. Both apply only to loans sanctioned within specific date windows and below certain loan- and property-value limits, and the 80EEA affordable-housing window has since closed for new loans (eligible borrowers who already claim it may continue). If you bought your first home on a qualifying loan, check whether you're eligible — it stacks on top of the 24(b) interest.