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Home Loan Tax Benefit Calculator

Interest and principal deductions year by year, self-occupied or let out, under both regimes

Loan and income

₹50.00 lakh

The home

Co-owners who are co-borrowers each claim their own share, against their own limits.

Before the standard deduction. Held the same every year.

Principal shares the one ₹1,50,000 pool with these.

Pre-EMI interest while the home was being built. Deducted in five equal parts from the year you take possession.

Bought or built within five years of the end of the year you borrowed?

Year 1 is the first tax year you own the finished home.

Rates as per Union Budget 2026 (no change to rates) · Income-tax Act, 2025 · verified 2026-08-13. Figures apply to tax year 2026-27. The Income-tax Act, 2025 replaced the 1961 Act on 1 April 2026 and renumbers sections; rates are unchanged. This tool is an estimate, not tax advice.

In year 1 the loan saves ₹93,450 of tax under the old regime and ₹0 under the new one, on your share of ₹4,21,182 interest and ₹99,511 principal.

Tax saved in year 1, old regime

₹93,450

New regime
₹0
Interest allowed (old)
₹2,00,000
Over 20 years, old
₹17,10,700
Over 20 years, new
₹0

Tax on the same income without the loan, less tax with it, cess included.

Old regime, year 1

Interest allowed, Section 22 (formerly 24(b))
−₹2,00,000
Interest over the cap (not deductible)
₹2,21,182
Income from house property
-₹2,00,000
Loss set off against salary
₹2,00,000
Principal under Section 123 (formerly 80C)
₹99,511
Tax for the year
₹2,41,950
Tax saved by the loan
₹93,450

New regime, year 1

Interest allowed, Section 22 (formerly 24(b))
−₹2,00,000
Interest over the cap (not deductible)
₹2,21,182
Income from house property
-₹2,00,000
Loss that cannot be used
₹2,00,000
Tax for the year
₹1,50,800
Tax saved by the loan
₹0

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How this is calculated

Formula

House property income = 0 − min(interest, ₹2,00,000)

With your numbers

  1. 1Interest claimedyear’s interest × share + ⅕ of pre-construction interest (years 1–5)₹2,00,000 allowed, capped at ₹2,00,000
  2. 2Loss set off (old regime)min(loss, ₹2,00,000)₹2,00,000 off salary
  3. 3Principal (old regime, Section 123 (formerly 80C))min(principal × share, ₹1,50,000 − other claims)₹99,511
  4. 4Tax savedtax without the loan − tax with itold ₹93,450, new ₹0
Tax saved in year 1, old regime₹93,450
  • For a self-occupied home the interest deduction, pre-construction instalment included, is capped at ₹2,00,000 a year (₹30,000 if the purchase or construction was not completed within five years of the end of the year of borrowing).
  • A loss from house property is set off against salary up to ₹2,00,000 a year under the old regime; the rest is carried forward for 8 years against house-property income only.
  • Under the new regime a house-property loss is neither set off nor carried forward. A self-occupied home’s interest therefore saves nothing there; a let-out home’s interest still reduces the tax on its own rent.
  • Section numbers are the Income-tax Act, 2025’s, with the 1961 Act’s in brackets. Stamp duty and registration, also within the 80C pool in the year paid, are not included.

Frequently Asked Questions

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