Various sections of the Income Tax Act, 1961 outline provisions of claiming tax benefits on interest paid on home loans. Home loan tax benefit India can be availed under section 24 and 80EE of the IT Act. Under section 24, you can claim a maximum deduction of Rs.2 lakh on the interest paid towards your home loan. However, for this, the house must be purchased or completed within 5 years from the end of the fiscal when you’ve availed the loan. If not, the amount is restricted to Rs.30,000.

For first-time home buyers, section 80EE provides an additional deduction of Rs.50,000 over and above Rs.2 lakh on the interest paid. However, for this, the value of the house should be equal to or less than Rs.50 lakh and the loan amount sanctioned shouldn’t be more than Rs.35 lakh. Also, the loan should be sanctioned within FY 16-17, and the home should be your first one.
Another crucial thing to note is that tax exemption on interest payment is not applicable if your house is under construction. The interest paid during the pre-construction period can be claimed as deduction in five equal instalments from the date when construction is over.
It is very vital to be aware of home loan rules and regulations which will help you when applying for house loan.