Mumbai resident can claim home loan tax benefits

A Mumbai resident is planning to buy an investment flat in Bhubaneshwar using a home loan. He wants to know about the tax benefits available for such a purchase. The tax benefits depend on whether he chooses the old or new tax regime. Under the old tax regime, he can claim deductions for home loan repayments under Section 80C, with a cap of ₹1.5 lakh. This applies to both self-occupied and rental properties. For interest paid on the home loan, the rules are different. In the new tax regime, there is no tax benefit for self-occupied properties. However, if the property is rented out, he can deduct the interest from the rental income, but only up to the amount of rent received. If the buyer opts for the old tax regime, he can claim a deduction of up to ₹2 lakh for interest on a home loan if the property is self-occupied. If the home is rented, he can deduct the full interest amount but there are limits on how much loss can be set off against other income. Investors should always consult with certified experts for personalized advice on tax and investment decisions.