How much tax can I save on a home loan?

Up to ₹3.5 lakh of deductions a year in the old regime: ₹1.5 lakh under 80C for principal and ₹2 lakh under 24(b) for interest. Your saving is that amount times your slab rate.

Does the new tax regime allow these deductions?

No. Deductions for principal under 80C and for self-occupied interest under 24(b) apply only if you choose the old regime.

Why is the benefit higher in early years?

Early EMIs are mostly interest, so you hit the 24(b) limit sooner. Later, interest shrinks and the saving falls.

Home loan tax benefit calculator

A home loan can lower your income tax in two ways. The principal you repay counts towards the Section 80C limit of ₹1.5 lakh. The interest you pay on a self-occupied home can be deducted under Section 24(b), up to ₹2 lakh a year. Both are available only under the old tax regime. Enter your loan details and pick your tax slab below. The calculator takes the principal and interest from your first 12 EMIs, applies the two limits and shows the tax you could save that year. Interest is highest in the early years, so the benefit is usually largest at the start. Section 80C is shared with other investments such as PF and life insurance, so your real room may be smaller. This is a planning estimate, not tax advice. Check with a tax professional before you file.

Loan amount

₹

₹50 L

Interest rate

Tenure

Your tax slab

Principal repaid in year 1: ₹1,13,492
Interest paid in year 1: ₹3,66,202
Section 80C deduction (max ₹1.5 lakh): ₹1,13,492
Section 24(b) deduction (max ₹2 lakh): ₹2,00,000
Tax saved in year 1: ₹94,048

Old tax regime only, for a self-occupied home. The new regime does not allow these deductions. This is a planning estimate, not tax advice.

Common questions

How much tax can I save on a home loan?: Up to ₹3.5 lakh of deductions a year in the old regime: ₹1.5 lakh under 80C for principal and ₹2 lakh under 24(b) for interest. Your saving is that amount times your slab rate.
Does the new tax regime allow these deductions?: No. Deductions for principal under 80C and for self-occupied interest under 24(b) apply only if you choose the old regime.
Why is the benefit higher in early years?: Early EMIs are mostly interest, so you hit the 24(b) limit sooner. Later, interest shrinks and the saving falls.