Home loans offer more than just financial support for buying your dream home—they also provide substantial tax benefits under the Income Tax Act, 1961. Let’s break down these benefits for better understanding.

What are the Different Home Loan Tax Sections?

Section	Nature of Deduction	Max Limit (₹)	Eligible For
24(b)	Interest on home loan	2,00,000	All homebuyers
80C	Principal repayment	1,50,000	All homebuyers
80EE	Additional interest (First-time buyer)	50,000	First-time buyers (FY16–17 loans)
80EEA	Additional interest (Affordable housing)	1,50,000	First-time buyers (FY19–22 loans)

1. Tax Deduction on Home Loan Interest – Section 24(b)

You can claim a deduction of up to ₹2 lakh per annum on the interest paid on your home loan for a self-occupied property.

Conditions:

• The loan must be taken for the purchase, construction, or repair of a residential property.
• Construction must be completed within 5 years from the end of the financial year in which the loan was taken.

2. Tax Deduction on Principal Repayment – Section 80C

The principal portion of the home loan EMI is eligible for a deduction of up to ₹1.5 lakh per annum under Section 80C.

Key Points:

• The house property should not be sold within 5 years of possession.
• If sold within 5 years, the deduction claimed earlier will be reversed in the year of sale.

3. Section 80EE for First Time Home Buyers

This section provides an additional deduction of up to ₹50,000 per financial year on interest paid. To claim this deduction, the Home Loan amount should not exceed Rs. 35 Lakh and the stamp value of the property should not exceed Rs. 50 Lakh.

4. Section 80EEA (for Affordable Housing)

This section allows an additional interest deduction of up to ₹1.5 lakh, specifically for affordable housing.

When Can You Claim These Deductions?

Deductions are available from the financial year in which the construction is completed or possession is taken.

Must Know: If you’re looking for a reliable, customer-friendly lender, Shubham Housing Finance is a great choice. They specialize in providing customized home loans for salaried, self-employed, and informal income segments—making it easier for individuals with non-traditional income documents to become homeowners.