Deduction for Principal Repayment – Section 80C

Deduction is available but with some conditions:

1. One should be the owner or co-owner of the property.
2. Maximum Deduction: ₹1, 50,000 per annum.
3. Construction is complete.
4. Loan is for purchase or construction of a residential house and not for repairs.
5. Only Principal component is available here, Interest shall be not allowed.

 Deduction for Interest on Home Loan – Section 24(b)

       Deduction is available if:

1. The property is self-occupied or vacant
2. Maximum Deduction: ₹2,00,000 per annum
3. Allowed on interest component
4. Construction is complete.
5. If property is under construction, interest which is paid before completion is allowed in 5 equal installments which shall start from the year of completion

 Additional Interest Deduction – Section 80EE / 80EEA

Section 80EE allows Income Tax Benefits on Home Loan to first-time buyers:

1. Deduction of up to Rs. 50,000 per financial year can be claimed. 
2. The loan must be sanctioned between 1st April, 2016 and 31st March, 2017.
3. Deduction shall be provided only if the loan amount is upto ₹35 lakh and the property value is not more than ₹50 lakh.

Section 80EEA allows Income Tax Benefits on Home Loan to first-time buyers as well:

1. Deduction of up to Rs. 1,50,000 per financial year can be claimed. 
2. The loan must be sanctioned between 1st April, 2019 and 31st March, 2022
3. Property value shall be upto 45 lakh
4. Section 80 EEA is not available if 80EE is claimed or if under new tax regime

In short we summarise (In New tax regime ): AY25-26

1. 80C (Principal) – Not available
2. 24(b) – Interest – Allowed only for let-out or deemed let-out properties
3. 80 EE/80EEA- Both are not allowed.

If you are under the old regime, you can claim full benefits. If under the new regime, only interest on let-out property is allowed.