A home loan for under-construction property can get tax deductions up to Rs. 2 lakhs on interest paid in a year and up to 1.5 lakhs for principal paid under Section 80C of the Income Tax Act.
The deduction for the interest repaid can be claimed once construction of the home is completed and is done within 5 years and deduction can be claimed in 5 equal installments. If the property isn’t constructed in 5 years, the maximum deduction for the interest paid on the home loan is Rs. 30,000.