ITR filing FY 2024-25: 5 smart home loan tax benefits every taxpayer should know

If you are a homeowner in the country, it’s important to be aware of the key tax benefits available when filing your Income Tax Return (ITR) for FY 2024–25. To make the most of your tax filing and maximise your savings, you must understand the fundamentals of tax law and apply them while calculating your tax liabilities.

Here are five home loan tax benefits you can claim under the old tax regime when filing your ITR:

Principal repayment under Section 80C

Taxpayers can claim up to ₹1.5 lakh annually on the principal component of a home loan under Section 80C, which also includes stamp duty and registration fees. This deduction is applicable once possession of the property is received, provided the property is held for at least five years.

Interest deduction under Section 24(b)

For a self-occupied house, interest of up to ₹2 lakh per annum is deductible under Section 24(b). This limit remains unchanged for FY 2024–25. In the case of let-out properties, there is no upper cap on interest deduction; however, the loss from house property that can be set off against other income is limited to ₹2 lakh in a financial year. The remaining loss can be carried forward for up to eight assessment years. Additionally, starting from Budget 2025, taxpayers can treat two properties as self-occupied for tax purposes, providing greater flexibility in tax planning.

Additional deduction for first‑time buyers

Under Section 80EE, eligible taxpayers can claim an additional ₹50,000 in interest deduction for home loans sanctioned during FY 2016–17. Section 80EEA offers an extra deduction of up to ₹1.5 lakh for affordable housing loans taken between April 2019 and March 2022, provided the property value does not exceed ₹45 lakh. It’s important to note that a taxpayer can claim a deduction under either Section 80EE or Section 80EEA, but not both.

Benefit for joint home‑loan holders

In cases where two or more individuals co-own a property and are co-borrowers on the home loan, each of them can separately claim deductions on the principal (under Section 80C) and interest (under Section 24(b)), effectively doubling the potential tax savings.

Capital gains exemption under Section 54

You can claim exemption on long-term capital gains under Section 54 if you sell a residential property and then reinvest the gains in buying or constructing another residential house in the country.

To qualify, the new house must be purchased either within one year before or two years after the date of sale, or constructed within three years of the sale. This exemption applies even if the new property is bought using a home loan and is in addition to deductions under Sections 80C and 24(b).

Outlook for borrowers filing ITR for FY 2024-25

Hence, taxpayers opting for the old regime can claim significant deductions. If planned effectively, these deductions can potentially total ₹3 lakhs. It is also important to keep in mind that in the new regime, most deductions are unavailable, making old regime planning more beneficial, especially for those with big home loans. That is why you should ensure that you include all relevant loan documents and interest certificates while filing your ITR for AY 2025-26.

Therefore, by claiming all eligible deductions, such as principal repayment, interest up to ₹2 lakh for self-occupied homes, first-time buyer benefits, and joint loan claims, taxpayers can maximise and boost their tax savings. To ensure full compliance and optimal benefits, it’s wise to consult a tax professional based on your specific case.

Disclaimer: This information is for illustrative purposes only and does not constitute tax or investment advice. Actual eligibility for deductions depends on individual circumstances and compliance with applicable tax laws. Please consult a qualified tax advisor for personalised guidance.