Home loan tax benefits — principal, interest and under-construction

1. Principal repayment — Section 80C (up to ₹1.5 lakh)

The principal portion of your EMI qualifies under 80C, within the overall ₹1.5 lakh limit (shared with PPF, ELSS, insurance, etc.). Stamp duty and registration charges also qualify in the year paid. Don't sell the house within 5 years, or the benefit reverses.

2. Interest — up to ₹2 lakh (Section 22, old 24(b))

• Self-occupied: interest deductible up to ₹2,00,000 a year.
• Let-out: the full interest is deductible against rent (overall house-property loss set-off capped at ₹2 lakh a year).

3. Under-construction property

• Interest paid before completion is accumulated and claimed in 5 equal instalments from the year of completion — see pre-construction interest — within the ₹2 lakh cap.
• Principal (80C) can be claimed only after completion/possession, not during construction.
• Once you've registered and taken possession, both deductions run normally.

4. Extra interest for affordable homes

First-time buyers may get an extra ₹1.5 lakh under Section 131 (old 80EEA).

Regime note

These are old-regime benefits (except let-out interest set-off). If your home-loan deductions are large, the old regime often beats the new — compare here.