2 min
12 May 2025
The Budget 2025 brings good news for homeowners across India. The government has made key changes to home loan tax deductions. These changes will help many Indians save more money on taxes. How budget 2025 will impact home loan tax deductions is what every loan holder needs to know right now.
If you own a home or plan to buy one soon, these new rules will affect your taxes. This article will help you understand the new benefits and how to make the most of them with a Bajaj Housing Finance Home Loan.
Key highlights of Budget 2025
The Budget 2025 has introduced several changes that will impact home loan tax benefits. These changes aim to make housing more affordable for all Indians. The government wants to help more people buy homes.
Increased home loan tax deductions
One of the biggest changes in Budget 2025 is the increase in home loan tax deductions. Under Section 24(b) of the Income Tax Act, the deduction limit for interest paid on home loans has gone up to Rs. 3 lakh per year from the earlier Rs. 2 lakh.
This change means homeowners can save up to Rs. 30,000 more in taxes each year. For someone in the 30% tax bracket, this is a big saving. How Budget 2025 Will Impact Home Loan Tax Deductions is clearly seen in this increased limit.
The principal repayment benefit under Section 80C stays at Rs. 1.5 lakh. But when combined with the higher interest deduction, the total tax benefit is much better now.
What does this mean for homebuyers?
The changes in Budget 2025 are great news for homebuyers across India. These new rules will have several positive effects on those who own homes or plan to buy them soon.
Combine competitive interest rates with these deductions to potentially save thousands per year. Check your loan offers with Bajaj Finserv by entering your mobile number and OTP to see how you qualify.
Understanding Section 80C deduction for home loans
Section 80C remains a key tool for tax savings on home loans. Under this section, you can claim a deduction for the principal amount you repay each year, up to Rs. 1.5 lakh.
This benefit is part of the overall Section 80C limit that includes other investments like PPF, ELSS, and insurance premiums. To get the most benefit, plan your investments to use the full Rs. 1.5 lakh limit.
Remember that if you sell your property within five years of purchase, the tax benefits claimed under Section 80C will be added back to your income in the year of sale. how budget 2025 will impact home loan tax deductions includes keeping these Section 80C rules unchanged, providing stability for long-term planning.
Additional home loan tax benefits
Besides the main deductions, Budget 2025 continues to support several other tax benefits for home loan borrowers:
Check your loan offers from Bajaj Finserv to make the most of these tax benefits. You may already be eligible, find out by entering your mobile number and OTP.
Benefits for existing home loan borrowers
Current home loan borrowers will also gain from Budget 2025. You do not need to take a new loan to benefit from the changes.
Why home loan interest deduction matters
The increased home loan interest deduction is perhaps the most important change in Budget 2025 for homeowners. This deduction directly reduces your taxable income, leading to lower tax payments.
For most home loans, the interest component is the largest part of your EMI in the early years. On a Rs. 50 lakh loan at 7.99% for 20 years, you pay about Rs. 3.95 lakh as interest in the first year. With the new Rs. 3 lakh deduction limit, you can claim more of this as a deduction.
How budget 2025 will impact home loan tax deductions is most significant for those with larger loans or higher interest rates. The increased limit provides relief exactly where it is needed most - on the interest burden that is heaviest in the initial years of a loan.
For someone in the 30% tax bracket, the extra Rs. 1 lakh deduction can save up to Rs. 30,000 in taxes per year. Over the life of a 20-year loan, this adds up to significant savings.
Union Budget 2025: Expectations on home loan deductions under the new tax regime
The New Tax Regime introduced earlier had fewer deductions but lower tax rates. Many homeowners stuck with the Old Tax Regime to keep their home loan benefits. Budget 2025 addresses this issue.
Under the updated New Tax Regime, home loan interest deductions now get special treatment. While most deductions were removed in this regime, the government has now included a special provision for home loan interest up to Rs. 1.5 lakh.
This change makes the New Tax Regime more attractive for homeowners. How budget 2025 will impact home loan tax deductions includes making the New Tax Regime viable for those with home loans.
The Institute of Chartered Accountants of India (ICAI) had requested this change to help salaried taxpayers who were stuck between the two tax systems. The government's response shows its commitment to supporting homeownership while simplifying taxes.
For let-out properties, the New Tax Regime now also allows setting off losses from house property against other income up to Rs. 2 lakh, similar to the Old Regime. This change helps landlords who face negative cash flows in the early years of their home loans.
Check your eligibility for a Bajaj Housing Finance Home Loan to make the most of these new tax provisions. You may already be eligible, find out by entering your mobile number and OTP.
Home loan deductions and budget 2025: How much can you save?
With all the changes in Budget 2025, it is important to understand exactly how much you can save. Let us look at each deduction type and the potential savings.
1. Tax deductions on home loan interest (Section 24(b))
With the new limit of Rs. 3 lakh for self-occupied property, someone in the 30% tax bracket can save up to Rs. 90,000 per year on taxes. This is Rs. 30,000 more than the earlier limit of Rs. 2 lakh that gave a maximum saving of Rs. 60,000.
2. Principal repayment deduction (Section 80C)
The Rs. 1.5 lakh deduction under Section 80C remains unchanged. This can save up to Rs. 45,000 in taxes for those in the 30% tax bracket. Remember that this limit is shared with other investments.
3. Additional deduction for first-time buyers (Section 80EE)
First-time buyers can save an extra Rs. 15,000 (30% of Rs. 50,000) through this deduction, on top of the regular benefits. This makes buying your first home even more attractive.
4. Benefits under affordable housing (Section 80EEA)
For affordable housing buyers, the additional Rs. 1.5 lakh deduction can save up to Rs. 45,000 more in taxes. How Budget 2025 Will Impact Home Loan Tax Deductions shows special support for affordable housing.
5. Tax benefits for co-borrowers
Couples or family members who are co-borrowers and co-owners can each claim these deductions separately. This can effectively double the tax benefits for a family.
6. Section 10(10D) and PMAY subsidy benefits
The PMAY subsidy directly reduces your loan amount, saving on interest costs. While not a tax deduction, this benefit complements the tax savings to make housing more affordable.
7. Impact of revised tax regime in Budget 2025
The inclusion of home loan benefits in the New Tax Regime gives homeowners more flexibility in choosing their tax system. How budget 2025 will impact home loan tax deductions includes making both tax regimes friendly to homeowners.
Practical steps to maximise home loan tax benefits
To get the most from the new tax benefits after Budget 2025, follow these practical steps:
How to apply for Bajaj Finserv Home Loan
Getting a home loan from Bajaj Finserv is easy and convenient. Follow these simple steps:
Check your eligibility for a Bajaj Housing Finance Home Loan right now. You may already be eligible, find out by entering your mobile number and OTP.
Eligibility criteria to get home loan from Bajaj Finserv
Before applying for a Bajaj Housing Finance Home Loan, make sure you meet these eligibility criteria:
Conclusion
How budget 2025 will impact home loan tax deductions is a positive story for homeowners and potential buyers. The increased deduction limits, continued support for first-time buyers, and inclusion of benefits in the New Tax Regime all make housing more affordable.
Bajaj Finserv offers home loans up to Rs. 15 crore* with interest rates starting from just 7.99%* p.a. With these attractive rates and the enhanced tax benefits after Budget 2025, now is an excellent time to buy your dream home or refinance your existing home loan.
The flexible tenure of up to 32 years, quick approval in 48 hours*, and no foreclosure fee make Bajaj Housing Finance Home Loan the perfect choice for smart homebuyers. The top-up loan facility of up to Rs. 1 crore gives you extra funds for any need without restrictions.
Take advantage of these benefits and the new tax deductions to make your home loan work harder for you. Check your eligibility today and take the first step toward owning your dream home with Bajaj Finserv.
If you own a home or plan to buy one soon, these new rules will affect your taxes. This article will help you understand the new benefits and how to make the most of them with a Bajaj Housing Finance Home Loan.
Key highlights of Budget 2025
The Budget 2025 has introduced several changes that will impact home loan tax benefits. These changes aim to make housing more affordable for all Indians. The government wants to help more people buy homes.
- Higher tax deduction limits - The limit on home loan interest deduction has been raised to Rs. 3 lakh from Rs. 2 lakh. This means you can save more on your taxes.
- Extended benefits for first-time buyers - First-time homebuyers get extra benefits to help them step onto the property ladder.
- New rules for the affordable housing segment - More support for those buying affordable homes under Rs. 45 lakh.
- Better benefits under the new tax regime - Even under the new tax system, home loan benefits remain strong.
Increased home loan tax deductions
One of the biggest changes in Budget 2025 is the increase in home loan tax deductions. Under Section 24(b) of the Income Tax Act, the deduction limit for interest paid on home loans has gone up to Rs. 3 lakh per year from the earlier Rs. 2 lakh.
This change means homeowners can save up to Rs. 30,000 more in taxes each year. For someone in the 30% tax bracket, this is a big saving. How Budget 2025 Will Impact Home Loan Tax Deductions is clearly seen in this increased limit.
The principal repayment benefit under Section 80C stays at Rs. 1.5 lakh. But when combined with the higher interest deduction, the total tax benefit is much better now.
What does this mean for homebuyers?
The changes in Budget 2025 are great news for homebuyers across India. These new rules will have several positive effects on those who own homes or plan to buy them soon.
- More money in your pocket - With higher deduction limits, you will pay less tax and have more money for other needs.
- Better loan affordability - Lower tax means you can afford bigger loans, helping you buy your dream home.
- Support for the housing market - These changes will boost housing demand, which is good for property values.
- Help for first-time buyers - Special benefits make it easier for new buyers to enter the market.
Combine competitive interest rates with these deductions to potentially save thousands per year. Check your loan offers with Bajaj Finserv by entering your mobile number and OTP to see how you qualify.
Understanding Section 80C deduction for home loans
Section 80C remains a key tool for tax savings on home loans. Under this section, you can claim a deduction for the principal amount you repay each year, up to Rs. 1.5 lakh.
This benefit is part of the overall Section 80C limit that includes other investments like PPF, ELSS, and insurance premiums. To get the most benefit, plan your investments to use the full Rs. 1.5 lakh limit.
Remember that if you sell your property within five years of purchase, the tax benefits claimed under Section 80C will be added back to your income in the year of sale. how budget 2025 will impact home loan tax deductions includes keeping these Section 80C rules unchanged, providing stability for long-term planning.
Additional home loan tax benefits
Besides the main deductions, Budget 2025 continues to support several other tax benefits for home loan borrowers:
- Section 80EE - First-time homebuyers can claim an extra Rs. 50,000 deduction on loan interest if the loan amount is under Rs. 35 lakh and property value is under Rs. 50 lakh.
- Section 80EEA - An additional Rs. 1.5 lakh deduction for affordable housing loans sanctioned up to March 31, 2026, for properties valued up to Rs. 45 lakh.
- Joint loan benefits - Co-borrowers who are also co-owners can claim deductions separately, doubling the benefit.
Check your loan offers from Bajaj Finserv to make the most of these tax benefits. You may already be eligible, find out by entering your mobile number and OTP.
Benefits for existing home loan borrowers
Current home loan borrowers will also gain from Budget 2025. You do not need to take a new loan to benefit from the changes.
- Easy tax filing - The increased deduction limits apply to your existing loan automatically.
- Good time to refinance - With higher deductions, it might be a good time to consider a balance transfer or top-up loan.
- More savings without changing loans - Just claim the higher deductions in your tax return without any changes to your loan.
Why home loan interest deduction matters
The increased home loan interest deduction is perhaps the most important change in Budget 2025 for homeowners. This deduction directly reduces your taxable income, leading to lower tax payments.
For most home loans, the interest component is the largest part of your EMI in the early years. On a Rs. 50 lakh loan at 7.99% for 20 years, you pay about Rs. 3.95 lakh as interest in the first year. With the new Rs. 3 lakh deduction limit, you can claim more of this as a deduction.
How budget 2025 will impact home loan tax deductions is most significant for those with larger loans or higher interest rates. The increased limit provides relief exactly where it is needed most - on the interest burden that is heaviest in the initial years of a loan.
For someone in the 30% tax bracket, the extra Rs. 1 lakh deduction can save up to Rs. 30,000 in taxes per year. Over the life of a 20-year loan, this adds up to significant savings.
Union Budget 2025: Expectations on home loan deductions under the new tax regime
The New Tax Regime introduced earlier had fewer deductions but lower tax rates. Many homeowners stuck with the Old Tax Regime to keep their home loan benefits. Budget 2025 addresses this issue.
Under the updated New Tax Regime, home loan interest deductions now get special treatment. While most deductions were removed in this regime, the government has now included a special provision for home loan interest up to Rs. 1.5 lakh.
This change makes the New Tax Regime more attractive for homeowners. How budget 2025 will impact home loan tax deductions includes making the New Tax Regime viable for those with home loans.
The Institute of Chartered Accountants of India (ICAI) had requested this change to help salaried taxpayers who were stuck between the two tax systems. The government's response shows its commitment to supporting homeownership while simplifying taxes.
For let-out properties, the New Tax Regime now also allows setting off losses from house property against other income up to Rs. 2 lakh, similar to the Old Regime. This change helps landlords who face negative cash flows in the early years of their home loans.
Check your eligibility for a Bajaj Housing Finance Home Loan to make the most of these new tax provisions. You may already be eligible, find out by entering your mobile number and OTP.
Home loan deductions and budget 2025: How much can you save?
With all the changes in Budget 2025, it is important to understand exactly how much you can save. Let us look at each deduction type and the potential savings.
1. Tax deductions on home loan interest (Section 24(b))
With the new limit of Rs. 3 lakh for self-occupied property, someone in the 30% tax bracket can save up to Rs. 90,000 per year on taxes. This is Rs. 30,000 more than the earlier limit of Rs. 2 lakh that gave a maximum saving of Rs. 60,000.
2. Principal repayment deduction (Section 80C)
The Rs. 1.5 lakh deduction under Section 80C remains unchanged. This can save up to Rs. 45,000 in taxes for those in the 30% tax bracket. Remember that this limit is shared with other investments.
3. Additional deduction for first-time buyers (Section 80EE)
First-time buyers can save an extra Rs. 15,000 (30% of Rs. 50,000) through this deduction, on top of the regular benefits. This makes buying your first home even more attractive.
4. Benefits under affordable housing (Section 80EEA)
For affordable housing buyers, the additional Rs. 1.5 lakh deduction can save up to Rs. 45,000 more in taxes. How Budget 2025 Will Impact Home Loan Tax Deductions shows special support for affordable housing.
5. Tax benefits for co-borrowers
Couples or family members who are co-borrowers and co-owners can each claim these deductions separately. This can effectively double the tax benefits for a family.
6. Section 10(10D) and PMAY subsidy benefits
The PMAY subsidy directly reduces your loan amount, saving on interest costs. While not a tax deduction, this benefit complements the tax savings to make housing more affordable.
7. Impact of revised tax regime in Budget 2025
The inclusion of home loan benefits in the New Tax Regime gives homeowners more flexibility in choosing their tax system. How budget 2025 will impact home loan tax deductions includes making both tax regimes friendly to homeowners.
Practical steps to maximise home loan tax benefits
To get the most from the new tax benefits after Budget 2025, follow these practical steps:
- Choose the right tax regime - Compare your tax liability under both old and new regimes to see which gives you better savings.
- Maximise your claim - Make sure you claim all eligible deductions including principal, interest, and additional benefits.
- Consider joint loans - If married, take a joint loan to double your tax benefits as a family.
- Keep proper documentation - Maintain interest and principal certificates from your lender for easy tax filing.
- Plan your loan tenure - Longer tenures have higher interest components in early years, maximising your tax benefits.
How to apply for Bajaj Finserv Home Loan
Getting a home loan from Bajaj Finserv is easy and convenient. Follow these simple steps:
- Click on the 'APPLY' button on the home loan page.
- Enter your personal details like name, phone number, and employment type.
- Select the type of loan you need - fresh loan, balance transfer, or top-up.
- Submit your OTP to verify your phone number.
- Provide additional details like monthly income and required loan amount.
- Enter your date of birth, PAN number, and other required information.
- Click 'SUBMIT' to complete your application.
Check your eligibility for a Bajaj Housing Finance Home Loan right now. You may already be eligible, find out by entering your mobile number and OTP.
Eligibility criteria to get home loan from Bajaj Finserv
Before applying for a Bajaj Housing Finance Home Loan, make sure you meet these eligibility criteria:
- Nationality: You must be an Indian citizen living in India.
- Age: Salaried applicants should be 23-67 years old, and self-employed professionals 23-70 years old at loan maturity.
- CIBIL Score: A score of 725 or higher is ideal for home loan approval.
- Occupation: You should be a salaried employee, a professional, or self-employed.
Conclusion
How budget 2025 will impact home loan tax deductions is a positive story for homeowners and potential buyers. The increased deduction limits, continued support for first-time buyers, and inclusion of benefits in the New Tax Regime all make housing more affordable.
Bajaj Finserv offers home loans up to Rs. 15 crore* with interest rates starting from just 7.99%* p.a. With these attractive rates and the enhanced tax benefits after Budget 2025, now is an excellent time to buy your dream home or refinance your existing home loan.
The flexible tenure of up to 32 years, quick approval in 48 hours*, and no foreclosure fee make Bajaj Housing Finance Home Loan the perfect choice for smart homebuyers. The top-up loan facility of up to Rs. 1 crore gives you extra funds for any need without restrictions.
Take advantage of these benefits and the new tax deductions to make your home loan work harder for you. Check your eligibility today and take the first step toward owning your dream home with Bajaj Finserv.
