Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Interest on a self-occupied house
For a self-occupied home, Section 24(b) allows a deduction of home-loan interest up to ₹2 lakh a year — available in the old regime, not the new one. The principal repayment is separately deductible within the ₹1.5 lakh Section 80C limit.
Let-out property is different
For a let-out property, the entire interest is deductible against the rent — there is no ₹2 lakh cap on the interest itself. However, the loss from house property that you can set off against other income in a year is capped at ₹2 lakh; the excess is carried forward. Confirm the current limits per the Finance Act.
A worked example
Example: you pay ₹2.4 lakh interest on a self-occupied home — you deduct ₹2 lakh (the cap) under the old regime, plus up to ₹1.5 lakh of principal under 80C. On a let-out flat with ₹3 lakh interest and ₹1.5 lakh rent, the ₹1.5 lakh net loss is set off (within the ₹2 lakh cap). These breaks are a key reason the old regime can suit borrowers. Our team can work it into your return.