A home loan does more than fund your flat: in the right circumstances it also reduces your taxable income every year for as long as you are repaying it. Most buyers know that some deduction exists, but the details matter: which sections apply, what qualifies, which tax regime allows the claim, and what happens if two people take the loan together. Getting these answers right before you book can change how you structure the loan; missing them can mean a lost deduction or an incorrect return. This guide explains the four main provisions plainly. All statutory limits cited are based on the Income Tax Act as currently in force; confirm the applicable limits, regime eligibility and your personal situation with a qualified CA before filing.

Prestige Medavakkam is a pre-launch gated apartment project on Medavakkam–Sholinganallur Road. Buyers planning to take a home loan for a unit here should factor both the EMI outflow and the potential tax deductions into their overall cost of ownership. For the EMI calculation side, see our home loan & EMI guide.

Home Loan Tax Deductions at a Glance

The table below summarises the four provisions most relevant to apartment buyers in Medavakkam. All deductions in this table are available only under the old income tax regime; confirm applicability with your CA.

Section 80C: Principal and Stamp Duty Deduction

Section 80C of the Income Tax Act allows individual taxpayers to deduct up to ₹1.5 lakh per year from taxable income, across a basket of qualifying instruments. Home loan principal repayment qualifies within this basket, as does the stamp duty and registration charges you pay at the time of purchase, in the year they are paid. The ₹1.5 lakh ceiling is shared across all 80C instruments you use in that assessment year: provident fund contributions, life insurance premiums, ELSS, tuition fees and the home loan principal are all drawn from the same pool. If you are already maximising 80C through other instruments, the home loan principal may not add an incremental deduction; if you are not, it fills the gap. Critically, this deduction is available only under the old income tax regime. Buyers who have opted for the new tax regime cannot claim 80C deductions. Our stamp duty & registration charges guide explains the registration costs that qualify under this provision in the year of payment.

Bottom line: Section 80C covers both principal repayment and stamp duty paid, up to ₹1.5 lakh per year combined with other 80C investments, only under the old tax regime; confirm current limits with your CA.

Section 24(b): Interest Deduction on Self-Occupied Property

Section 24(b) allows a deduction for the interest component of your home loan repayment. For a self-occupied residential property, the deduction is capped at ₹2 lakh per year under the old tax regime. This is separate from and in addition to Section 80C. If the property is let out rather than self-occupied, the old regime allows you to deduct the actual interest paid without a monetary cap, but the resulting loss from house property is subject to set-off and carry-forward rules; your CA should confirm these. Under the new tax regime, the ₹2 lakh interest deduction for self-occupied property is not available. For most salaried buyers taking a home loan on a flat they will live in, Sections 24(b) and 80C together are the primary reason to evaluate the old versus new tax regime before filing. A good tax advisor will run both regime scenarios for your specific income and investments. Our first-time home buyer guide covers the broader purchase process in which the tax structure decision sits.

Bottom line: Section 24(b) gives up to ₹2 lakh per year on interest for a self-occupied property, under the old regime only; different rules apply for let-out property; confirm with your CA.

Section 80EEA and Joint Loans: Additional Benefits Worth Checking

Section 80EEA was introduced to give an extra ₹1.5 lakh interest deduction to first-time home buyers purchasing affordable housing with a stamp duty value up to ₹45 lakh, over and above the ₹2 lakh Section 24(b) limit. The eligibility window covered loans sanctioned between April 1, 2019 and March 31, 2022. If your loan falls in that window and you have not yet verified eligibility, discuss it with your CA now; it could represent a meaningful deduction for the remaining loan tenure. For loans sanctioned after March 2022, this provision does not currently apply. NRI buyers should also review the additional compliance considerations in our NRI guide to buying property.

Joint home loans deserve separate attention for buyers purchasing a flat with a spouse or family member. Each co-borrower who is also a co-owner can independently claim Section 80C and Section 24(b) deductions up to the individual limits, in their own income tax return. A couple both earning taxable income and both holding co-ownership of the flat can effectively claim double the household deduction, subject to the proportionate ownership and the regime each chooses. The co-ownership share should be documented at the time of registration. Confirm the exact proportions and filing approach with your CA before booking the loan.

Bottom line: Section 80EEA (where applicable) adds ₹1.5 lakh to the interest deduction; joint loans allow each co-owner to claim independently; consult your CA on proportions and regime choice.

Old vs New Tax Regime: The Decision That Changes Everything

All four home loan tax provisions described in this guide are available only under the old income tax regime. The new tax regime, which became the default from FY 2024-25, offers lower slab rates in exchange for foregoing most deductions including Sections 80C, 24(b) and 80EEA. For a buyer with a large home loan and significant interest outflow, the old regime's deductions may reduce taxable income enough to make it more advantageous despite the slightly higher slab rates. For a buyer with a smaller loan and limited other deductions, the new regime's lower slabs may produce a lower tax bill. The crossover point is personal: it depends on your total income, the loan amount, the interest rate, how much of the ₹1.5 lakh 80C ceiling you are already using, and whether you have a co-borrower co-owner. Sit with your CA before filing your first return after the purchase, run the numbers for both regimes, and choose the one that leaves you with the lower tax liability. Salaried employees can generally switch between regimes year to year with some constraints; confirm the switching rules and any employer-related implications with your CA.

Bottom line: Home loan deductions only work under the old tax regime; run both regimes with your CA for your specific income and loan size before choosing.

Conclusion

A home loan in India offers meaningful tax deductions under Sections 80C, 24(b) and 80EEA, but only under the old income tax regime. Section 80C covers principal repayment and stamp duty up to ₹1.5 lakh per year; Section 24(b) covers interest on a self-occupied property up to ₹2 lakh per year; Section 80EEA adds a further ₹1.5 lakh for eligible first-time buyers on affordable housing under loans sanctioned in the applicable window. Joint loans allow co-owning co-borrowers to each claim independently, which can make the total household benefit significantly larger. None of this replaces a conversation with your CA: your income, loan size, other 80C instruments, regime choice, and whether you are self-employed or salaried all affect the final numbers. The key actions are to check which provisions apply to your loan at the time of booking, document co-ownership clearly if the loan is joint, and run the old-versus-new regime calculation with your CA before your first return after purchase.

To learn about the pricing and configuration options at Prestige Medavakkam that affect your loan size and tax planning, contact the sales team directly.