Quick answer: In 2026, if you have an active home loan on a self-occupied property, the OLD TAX REGIME is generally far more beneficial because it permits deductions up to ₹2,00,000 per year on home loan interest under Section 24(b) and up to ₹1,50,000 per year on principal repayment under Section 80C. In contrast, the NEW TAX REGIME completely disallows home loan tax deductions for self-occupied properties (both interest and principal are ₹0 deductible). The only exception under the New Tax Regime is for rented / let-out property, where interest paid can be offset against gross rental income up to the rental value.
Check Your Borrowing Power: Calculate your exact eligible loan amount, monthly EMI, and permissible FOIR based on your salary and current debts using our interactive Home Loan & Income Eligibility Calculator.
By Vijay Arjun V (B.Pharm, PGDM): authorised LIC HFL DSA since 2002 and DME (Direct Marketing Executive) appointed by LIC HFL. Loan terms checked on lichousing.com on October 2026.
Head-to-Head Comparison: Home Loan Deductions in Both Regimes
| Home Loan Deduction Category | Old Tax Regime | New Tax Regime (Default) |
|---|---|---|
| Interest on Self-Occupied Home (Sec 24b) | Deductible up to ₹2,00,000 / year | NIL (₹0 deduction) |
| Principal Repayment (Sec 80C) | Deductible up to ₹1,50,000 / year | NIL (₹0 deduction) |
| Stamp Duty & Registration (Sec 80C) | Deductible in Year 1 (up to ₹1.5L) | NIL (₹0 deduction) |
| Interest on Rented / Let-Out Property | Full interest deductible (Loss set-off capped at ₹2L) | Deductible only against rental income (Zero loss carry-forward) |
| Joint Borrower Deductions (Couple) | Up to ₹7,00,000 combined deductions | NIL |
Real Tax Calculation Example: ₹15 Lakh Annual Salary
Consider an IT professional in Hyderabad with a gross annual salary of ₹15,00,000 paying ₹2,00,000 in home loan interest and ₹1,50,000 in principal/80C investments:
| Tax Calculation Metric | Under New Tax Regime | Under Old Tax Regime (With Home Loan) |
|---|---|---|
| Gross Total Income | ₹15,00,000 | ₹15,00,000 |
| Standard Deduction | ₹75,000 | ₹50,000 |
| Home Loan Interest (Sec 24b) | ₹0 | ₹2,00,000 |
| Principal Repayment (Sec 80C) | ₹0 | ₹1,50,000 |
| Net Taxable Income | ₹14,25,000 | ₹11,00,000 |
| Net Income Tax Payable | ~₹1,27,400 | ~₹1,14,400 |
| Net Annual Tax Advantage | — | Save ₹13,000+ under Old Regime |
When combined with Health Insurance (Sec 80D) and NPS (Sec 80CCD), the Old Tax Regime saves an additional ₹35,000 to ₹60,000 annually for homeowners!
The Breakeven Rule of Thumb
If your total annual deductions—including home loan interest (₹2L), Section 80C (₹1.5L), HRA, and health insurance—exceed ₹3.75 Lakhs to ₹4.0 Lakhs, you will almost always pay lower tax by opting for the Old Tax Regime.
Frequently asked questions
Can I switch between Old and New regimes every year?
Yes. Salaried individuals without business income have the legal freedom to choose between the Old and New tax regimes each year when filing their annual ITR.
Where can I download the LIC HFL home loan provisional interest certificate?
You can download your provisional and annual tax interest certificate directly from the LIC HFL Customer Portal or the HomY mobile app under the “Tax Certificate” menu.
Hyderabad Home Loans is run by Elite Financial Services, an authorised Direct Selling Agent (DSA) of LIC Housing Finance Ltd since 2002. Loans are sanctioned solely at LIC HFL’s discretion; terms apply.
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