Home Loan Tax Breaks: Are You Claiming ₹3.5L?

A home loan is not just about buying a house — it comes with EMI choices, eligibility rules, and tax perks worth up to ₹3.5 lakh a year. Here is everything you need to know before you sign.

Here's what happened: Under Section 80C and 24(b) of the Income Tax Act, home loan borrowers can claim up to ₹1.5 lakh on principal repayment and ₹2 lakh on interest paid annually.. Home loans come in multiple types — fixed rate, floating rate, and hybrid — each with different risk and EMI stability profiles for the borrower.. Lenders assess eligibility using your income, credit score (typically 700+), existing EMIs, age, and employment type before approving any loan amount..

What you should do: Check your CIBIL score before applying — a score below 700 can get your loan rejected or push your interest rate up by 0.5–1% easily.. Compare at least 3 lenders (banks and HFCs) on effective interest rate, processing fee, and prepayment penalty — do not just go with your salary bank.. File your home loan interest certificate every year and claim both Section 24(b) and 80C deductions in your ITR to maximise your tax refund..

First-time buyers can claim an additional ₹50,000 deduction under Section 80EE (loan sanctioned between Apr 2016–Mar 2017) or ₹1.5 lakh under 80EEA if the stamp duty value was under ₹45 lakh — most borrowers miss this entirely.