How does home loan help in saving income tax?

Home loan tax savings primarily come from two components of your EMI: principal and interest. Under the old tax regime, you can claim principal repayment (plus stamp duty and registration charges in the year you pay them) under Section 80C up to ₹1.5 lakh in total, along with your other 80C items. You can also claim interest paid under Section 24(b) up to ₹2 lakh per year for a self-occupied home. If the house is let out, interest deduction can be claimed, but the loss you can adjust against other income is generally capped, so don’t assume “unlimited benefit” in hand. Under the new tax regime, interest deductions on self-occupied property are not allowed, so many people don’t receive the home loan tax benefit unless their situation qualifies under the house property rules. So simple funda: if you are claiming 80C + home loan interest deductions, old regime often gives more tax saving, warna new regime may still be better overall depending on slabs. (incometax.gov.in)