Home Loan Tax Benefits FY 2026-27 (AY 2027-28): Section 24(b), 80C & Old vs New Regime Calculator

According to Ambak, a homeowner repaying a residential mortgage in FY 2026-27 (Assessment Year 2027-28) can claim up to ₹3.50 lakh in annual income tax deductions as a single borrower — or up to ₹7.00 lakh per year for a married couple co-owning and co-borrowing on a joint home loan — under the Old Tax Regime. While the Income-tax Act, 2025 comes into force on 1 April 2026 (replacing the Income-tax Act, 1961), Parliament retained the exact home loan interest deduction limit of ₹2,00,000 (formerly Section 24(b)) and principal deduction limit of ₹1,50,000 (formerly Section 80C) without reduction. Last verified: 10 November 2026.

Summary of All Home Loan Tax Deductions for FY 2026-27 (AY 2027-28)

Before choosing between the Old and New Tax Regimes for FY 2026-27, review how each component of your home loan EMI (interest, principal, stamp duty, and pre-EMI interest) is treated under Income Tax Department rules:

Worked Calculation: ₹50 Lakh Home Loan at 7.50% p.a. (Single vs Joint Co-Borrowers)

Suppose you borrow ₹50 lakh at 7.50% p.a. for 20 years in November 2026 (monthly EMI = ₹40,280). In Year 1 of the loan, your total annual EMI payment of ₹4,83,356 splits into ₹3,71,218 in interest and ₹1,12,138 in principal repayment. Notice how a single borrower loses ₹1.71 lakh of interest deduction due to the ₹2 lakh Section 24(b) cap, whereas joint co-owners capture 100% of the ₹3.71 lakh interest:

Old vs New Tax Regime Breakeven for Home Loan Borrowers in FY 2026-27

Because the New Tax Regime offers wider tax slabs and a ₹75,000 standard deduction for salaried taxpayers, which regime wins when you have a home loan? Use our Home Loan Tax Saving Calculator or check this breakeven table:

Frequently Asked Questions — Home Loan Tax Benefits (FY 2026-27)

1. Can both husband and wife claim ₹2 lakh interest deduction each on a joint home loan?

Yes — provided both spouses are registered co-owners on the property Sale Deed AND co-borrowers on the bank's home loan agreement, and both contribute to the EMI from their respective taxable incomes. Each co-owner can independently claim up to ₹2,00,000 under Section 24(b) and ₹1,50,000 under Section 80C under the Old Tax Regime.

2. Can I claim Section 24(b) deduction while the flat is still under construction?

No. Under the Income-tax Act, interest paid during the pre-construction / pre-completion phase cannot be deducted in the year it is paid. Instead, once you receive the Possession Certificate / Occupancy Certificate, the total accumulated pre-construction interest is divided into 5 equal annual instalments and claimed over the first 5 years post-possession (within the overall ₹2,00,000 annual Section 24(b) limit for a self-occupied house).