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Loan Tax Benefit

Loan Tax Benefit

Calculate tax deductions available on home and other loans.

Loan & Income Details

Annual Income₹12 Lakh

₹

Interest Paid (this year)₹2.20 Lakh

₹

Principal Paid (this year)₹1.20 Lakh

₹

Property Type

Self-Occupied

Let-Out

Deduction Break-up

Eligible Interest (Sec 24b)₹2,00,000

Eligible Principal (Sec 80C)₹1,20,000

Total Deduction₹3,20,000

Your Marginal Tax Rate25.7%

Estimated Tax Saved₹82,160

Old Regime only — the New Regime doesn't allow these deductions. Sections 80EE and 80EEA aren't available for a new loan this year — both are closed sanction-date windows (80EE: FY2016-17, 80EEA: FY2019-22). Indicative estimate, not tax advice.

What this home loan tax benefit calculator is for

TaxNext's home loan tax benefit calculator works out how much of a home loan's interest and principal actually reduces taxable income, under section 24(b) for interest and section 80C for principal. These deductions are available only under the old regime — the new regime allows neither — so this calculator is aimed at old-regime taxpayers repaying a home loan.

• See how much home loan interest is actually deductible this year
• Understand the difference between self-occupied and let-out property caps
• See the resulting tax saved at your marginal rate

Worked examples

Self-occupied home, ₹12,00,000 income

1. Interest paid₹2,80,000
2. Eligible interest₹2,00,000
3. Interest usable against other income this year₹2,00,000
5. Eligible principal (80C, capped)₹1,50,000
6. Total deduction₹3,50,000
7. Marginal tax rate on this deduction25.3%
Tax saved₹88,400

Self-occupied interest is capped at ₹2,00,000 regardless of how much interest was actually paid — the extra ₹80,000 paid above the cap in this example gets no deduction at all.

Let-out property, ₹18,00,000 income

1. Interest paid₹3,50,000
2. Eligible interest₹3,50,000
3. Interest usable against other income this year₹2,00,000
4. Interest carried forward₹1,50,000
5. Eligible principal (80C, capped)₹1,50,000
6. Total deduction₹3,50,000
7. Marginal tax rate on this deduction31.2%
Tax saved₹1,09,200

Let-out interest has no cap on the deduction itself, but the loss it creates can only offset up to ₹2,00,000 of other income this year — the rest carries forward for up to 8 years, it isn't lost.

What this estimate covers

Sections 24(b) and 80C for a single home loan under the old regime. It does not cover sections 80EE or 80EEA (first-time buyer benefits, only available for loans sanctioned in specific past windows this rule set marks as no longer applicable), or the 80C principal deduction competing with other 80C investments — the ₹1,50,000 cap is shared across all of 80C, not exclusive to home loan principal.

Figures are illustrative estimates, not tax advice. See the Income Tax Department deduction tables.

Reviewed by VNAV & Associates, Chartered Accountants. Last updated: August 2026.

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