The cap, regime by regime
| Situation | Old regime | New regime |
|---|---|---|
| Self-occupied home | Interest capped at ₹2,00,000 (section 24(b)) | Not deductible |
| Let-out property | Interest against rent; loss set-off capped at ₹2,00,000 a year | Not deductible |
| Maximum claim | ₹2,00,000 | ₹0 (self-occupied) |
Because the cap is on the interest claimed, not on the loan itself, a single self-occupied loan pays down its deductible head within the first years of an EMI schedule. Once interest crosses ₹2,00,000, the excess has no old-regime effect for the year in the self-occupied case.
Example — a self-occupied home with ₹3,00,000 of annual interest: the old regime deducts ₹2,00,000 and notes the excess; the new regime deducts nothing. The calculator prints both outcomes and warns that the field’s effect differs by regime.
How it fits the computation
Section 24(b) sits inside the house-property head: annual value (for a self-occupied home, nil) less municipal taxes, less the 30% standard deduction where rent exists, less the interest. That makes the head a negative amount of up to ₹2,00,000 for the old regime, which reduces gross total income before Chapter VI-A deductions apply. The slab tables then price the remaining income.
Frequently asked questions
How much home-loan interest can I deduct?
For a self-occupied home under section 24(b), up to ₹2,00,000 a year in the old regime. Interest being paid but not deducted is not carried into the next year through this cap; the balance is dealt with under the set-off rules rather than on this page.
Can I claim it under the new regime?
No. Self-occupied home-loan interest is not part of the new regime. Under section 115BAC the only interest deduction that survives is for a property that qualifies as let-out
What about a let-out property?
Against the rent, you deduct municipal taxes, a 30% standard deduction on the net annual value, and interest. The loss from house property that can be set off in one year is limited to ₹2,00,000; the rest carries forward.
Does the pre-construction interest have a separate limit?
Pre-construction interest is deductible in five equal instalments starting from the year of completion, and all such instalments together fall within the same ₹2,00,000 self-occupied cap.
Is the principal part of the same deduction?
No. The principal repayment is a section 80C deduction, which shares the ₹1,50,000 limit and is old-regime only.