Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The home-loan deductions
A home loan gives two breaks in the old regime: interest on a self-occupied house up to ₹2 lakh a year under Section 24(b), and the principal repayment within the ₹1.5 lakh Section 80C limit. Neither is available for a self-occupied house in the new regime.
Why it tips the balance
Because these can together remove up to ₹3.5 lakh from taxable income, a borrower with a sizeable loan often pays less under the old regime — even though its slab rates are higher. The more interest and 80C you genuinely claim, the more the old regime tends to win. Let-out property has different (uncapped interest but capped set-off) rules — confirm for your case.
A worked example
Example: a borrower paying ₹2 lakh interest and ₹1.5 lakh principal removes ₹3.5 lakh under the old regime. On a ₹15 lakh salary that can save more than the new regime’s lower rates do — but on a small loan, the new regime may still win. The honest answer is to compute both. Our team can run your exact comparison.