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Home loan tax benefit calculator for India

Income-tax Act, 2025 as amended by the Finance Act, 2026, tax year 2026-27; limits checked on 18 October 2026 against the Gazette of India and the Income Tax Department.

In short

On a ₹50 lakh home loan over 20 years at 7.61%, the first year's EMIs pay about ₹3,76,691 of interest and ₹1,10,708 of principal. For a house you live in, the old regime deducts ₹2,00,000 of interest and ₹1,10,708 of principal, which saves ₹96,941 of tax at a 30% slab with cess; the default regime deducts nothing for a self-occupied house. The interest cap of ₹2,00,000 (section 22) and the principal cap of ₹1,50,000 (section 123, shared with other investments) apply only if you opt out of the default regime.

Calculator

Calculate the tax benefit of your home loan

Enter one tax year's figures from your lender's certificate. The two regimes are recalculated instantly.

Old regime: interest deducted₹2,00,000
Old regime: principal and stamp duty (section 123)₹1,10,708
Old regime: section 130 or 131₹0
Old regime: income reduced by₹3,10,708
Tax saved, old regime₹96,941
Default regime: interest deducted₹0
Default regime: principal₹0
Tax saved, default regime₹0
Difference₹96,941 more in the old regime

Self-occupied: interest deducted up to ₹2,00,000, or ₹30,000 if the house was not completed within 5 years from the end of the tax year of the loan or you have no lender's certificate; the pre-construction interest instalment counts inside that cap (section 22(2), as amended by the Finance Act, 2026). Let out: rent less municipal taxes, less 30%, less the whole interest; a loss offsets other income up to ₹2,00,000, the rest is carried forward 8 years (sections 109 and 110). Principal, stamp duty and registration: up to ₹1,50,000 with the other sums of Schedule XV (section 123); the deduction is reversed if you sell the house within 5 years of the end of the tax year you got possession. Section 131: up to ₹1,50,000 more interest if the stamp duty value was not above ₹45 lakh and you owned no house when the loan was sanctioned; section 130: up to ₹50,000, loan up to ₹35 lakh and house up to ₹50 lakh. Default regime (section 202): none of these for a self-occupied house, no set-off of a house property loss. Tax saved = deduction × your marginal rate × (1 + 4% cess); surcharge, rebates and a change of slab are not included. The choice of regime depends on your whole income: compare your full tax in both.

First-year benefit by loan, self-occupied house

LoanInterest, year 1Principal, year 1Old regime deductionTax saved, old regimeTax saved, default regime
₹25 lakh₹1,88,346₹55,354₹2,43,700₹76,034₹0
₹50 lakh₹3,76,691₹1,10,708₹3,10,708₹96,941₹0
₹1 crore₹7,53,383₹2,21,416₹3,50,000₹1,09,200₹0

20-year loan at 7.61%, the RBI weighted average lending rate on fresh housing loans (August 2026, provisional); first twelve EMIs; house completed with the lender's certificate; no other section 123 investment; marginal rate 30% in the old regime, with 4% cess.

Before you borrow

General information drawn from the official sources cited and dated on this page. It is not legal, tax or financial advice: for your own situation, ask a licensed professional.

Sources