Let-out home-loan interest — no ₹2 lakh cap (Section 24(b))

✍️ EaseValue Advisors · Updated 17 Jul 2026 · FY 2025-26

In short

On a let-out (rented) house, the full home-loan interest is deductible against the rent — there is no ₹2 lakh cap (unlike a self-occupied house). A powerful deduction for landlords.

The rule

Self-occupied house → interest capped at ₹2 lakh (Sec 24(b)). Let-out house → no cap; deduct the entire interest against rental income after the 30% standard deduction.

The catch — ₹2 lakh set-off cap

If the interest creates a loss from house property, only ₹2 lakh of that loss offsets your other income each year (Sec 71B); the balance carries forward 8 years against future house-property income.

Who it helps

Anyone with a rented/second property on loan. Old regime only — keep the lender's interest certificate.

The law behind it

Section 24(b) Section 71B

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General information for FY 2025-26 (AY 2026-27), not advice on your specific case. Limits, rates and conditions change with each Finance Act and depend on your facts — confirm before acting. © EaseValue Advisors LLP.

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