Section 24(b) is the home-loan interest deduction — one of the most valuable benefits for anyone repaying a housing loan. Here's how it works, including the Rs 2,00,000 cap and the difference for let-out property. It's an old-regime benefit.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-15
Quick answer
Section 24(b) lets you deduct home-loan interest up to Rs 2,00,000 on a self-occupied home, and without that cap on a let-out one. Here's how.
For a self-occupied house, you can deduct the interest you pay on your home loan up to Rs 2,00,000 a year under Section 24(b). This is separate from the principal repayment, which is claimed under 80C — so a home loan gives you benefits on two fronts.
If the property is genuinely let out, the interest isn't capped at Rs 2,00,000 — you can deduct the full interest against the rental income. However, the overall house-property loss you can set off against your other income in a year is limited to Rs 2,00,000, with the balance carried forward.
Keep the two separate: the principal portion of your EMIs counts toward your Rs 1,50,000 80C limit, while the interest portion is claimed under Section 24(b). Your lender's annual statement splits the EMI into principal and interest for exactly this purpose.
Interest paid during the construction period, before you take possession, can be claimed in equal instalments over a number of years once construction is complete — within the overall limits. Don't lose this; it's commonly forgotten for under-construction homes.
The Section 24(b) deduction on a self-occupied home is available in the old regime. For a borrower paying significant home-loan interest, this deduction is often a decisive factor in choosing the old regime over the new.
Up to Rs 2,00,000 a year on a self-occupied home under Section 24(b) , and the full interest on a genuinely let-out property — though the house-property loss set off against other income is capped at Rs 2,00,000 a year.
Yes — principal under 80C (within Rs 1,50,000) and interest under Section 24(b) (up to Rs 2,00,000 self-occupied). A home loan gives benefits on both fronts in the old regime.
Yes — pre-construction interest is claimed in equal instalments over a number of years after construction completes , within the overall limits. It's commonly forgotten for under-construction homes.
Repaying a home loan? Write to the firm and we'll make sure your 24(b) interest and 80C principal are both claimed.