About the Home Loan Tax Benefit Calculator (India)
This calculator estimates how much income tax a housing loan saves you under India’s old tax regime for tax year 2026-27. It applies the deduction for interest on a home loan (up to ₹2,00,000 a year for a self-occupied house — the familiar Section 24(b)) and the deduction for principal repayment within the ₹1,50,000 combined limit (the familiar Section 80C), then recomputes your tax with the official old-regime slabs, the ₹12,500 rebate, surcharge and 4% cess.
Choose self-occupied or let-out. For a let-out house, rent less municipal taxes and the 30% standard deduction is taxed, the full interest is deductible against it, and any resulting loss can be set off against other income only up to ₹2,00,000 a year — the rest is carried forward for up to eight years. The calculator shows the carried-forward amount separately.
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and renumbered these sections, but the limits above are unchanged; they match the Income Tax Department’s published deduction tables for AY 2026-27 (financial year 2025-26), the last year under the old Act. The new tax regime allows no interest deduction on a self-occupied home, and for a let-out home only against its own rent with no set-off, so this tool focuses on the old regime.
With the default inputs, the tax saved this year is ₹93,600.00. Change any value above to recalculate instantly.
How to use the home loan tax benefit calculator (india)
- 1Enter your old-regime taxable income before the home loan deductions.
- 2Choose your age group and whether the house is self-occupied or let out.
- 3Enter the interest and principal from your lender’s annual interest certificate.
- 4Enter other investments that already use the ₹1.5 lakh limit.
- 5For a let-out home, add the annual rent and municipal taxes paid.
- 6Read the tax saved and any interest that is capped or carried forward.
Formula and method
For a self-occupied house the annual value is nil, so the interest deduction creates a house-property loss of up to ₹2,00,000 (₹30,000 for repair loans or loans taken before 1 April 1999). For a let-out house the annual value is rent minus municipal taxes; 30% of it is deducted as a standard deduction and the full interest is subtracted. A net loss reduces other income by at most ₹2,00,000 in the year, and the excess is carried forward.
Principal repaid is added to your other 80C-type investments and capped at the ₹1,50,000 combined limit. Tax is then computed twice under the old regime — with and without the home loan — using slabs of 0%, 5%, 20% and 30% (higher exemption for senior and super-senior citizens), the rebate that zeroes tax up to ₹5 lakh, surcharge with marginal relief above ₹50 lakh, and 4% health and education cess. The difference is the tax saved.
- HP income
- Income (or loss) from house property
- 0.7
- Annual value after the 30% standard deduction
- other 80C
- PF, PPF, ELSS, insurance etc. already claimed
Worked examples
Self-occupied home, ₹15 lakh income
Interest of ₹2.5 lakh is capped at ₹2 lakh, and only ₹1 lakh of the ₹1.2 lakh principal fits after ₹50,000 of other investments. Taxable income falls from ₹15 lakh to ₹12 lakh, all in the 30% slab, so tax drops from ₹2,73,000 to ₹1,79,400 including cess — a saving of ₹93,600.
Let-out flat with a large interest bill
Rent of ₹3 lakh less ₹20,000 municipal tax and 30% standard deduction leaves ₹1,96,000 of taxable rent. Subtracting ₹6 lakh of interest gives a ₹4,04,000 loss: ₹2 lakh is set off against salary and ₹2,04,000 is carried forward. With ₹1 lakh of principal, taxable income falls by ₹4.96 lakh versus not having the loan, saving ₹1,54,752.
Income in the 20% slab
With the ₹1.5 lakh limit already used by other investments, only the ₹2 lakh interest deduction helps. Taxable income falls from ₹9 lakh to ₹7 lakh, all at 20%, saving ₹40,000 plus 4% cess = ₹41,600.
Frequently asked questions
How much tax can I save on a home loan in India?+
Under the old regime you can deduct up to ₹2 lakh of interest on a self-occupied home and up to ₹1.5 lakh of principal (within the combined 80C limit). In the 30% slab that is worth up to about ₹1,09,200 a year including 4% cess.
Can I claim home loan interest in the new tax regime?+
Not for a self-occupied house. For a let-out property the new regime allows interest to be deducted from that property’s rental income without limit, but any loss cannot be set off against other income or carried forward.
What is the limit for let-out property interest?+
There is no cap on interest deducted from a let-out property’s income, but the resulting house-property loss can reduce other income by at most ₹2 lakh a year under the old regime. The balance is carried forward for up to eight assessment years.
When is the self-occupied interest deduction only ₹30,000?+
The ₹30,000 limit applies when the loan was taken before 1 April 1999 or is for repair or renovation rather than purchase or construction. Loans for buying or building a home on or after that date qualify for up to ₹2 lakh.
Are Section 24(b) and 80C still valid after the new Income-tax Act?+
The Income-tax Act, 2025 took effect on 1 April 2026 and renumbered the sections, but the home loan deduction limits carried over unchanged for tax year 2026-27. Many lenders and employers still refer to them by the old section numbers.
Can I claim deductions for 80EE or 80EEA?+
Only if the loan was sanctioned in the qualifying windows: 80EE for loans sanctioned between 1 April 2016 and 31 March 2017 (up to ₹50,000), and 80EEA for first-time buyers with loans sanctioned between 1 April 2019 and 31 March 2022 (up to ₹1.5 lakh). These are not included in this calculator.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.