How to Save Income Tax on Your Home Loan

Taking a home loan not only helps you own a house but also offers significant income tax benefits. You can claim deductions on both the principal and interest components of your EMI. Under Section 80C, you can claim up to ₹1.5 lakh per year on principal repayment. Under Section 24(b), up to ₹2 lakh per year can be claimed on interest paid for self-occupied property. If you’re a first-time homebuyer, additional deductions are available under Section 80EE (₹50,000) or 80EEA (₹1.5 lakh), subject to eligibility. Co-borrowers who are co-owners can also claim these benefits individually, effectively doubling the savings. To claim these deductions, ensure the construction is complete, possession is taken, and proper documentation is maintained. With smart planning, your home loan can become a powerful tool for reducing your annual tax outgo.