Whether Deductions for Interest paid on Home loans under New Tax regime for financial year 2024-25 f

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This discussion clarifies whether interest paid on a home loan can be deducted under the new tax regime for the financial year 2024-25. While interest on self-occupied property is not allowed, for let-out properties, the deduction is permitted but capped at the amount of rental income received. The query seeks confirmation on specific IT Act sections regarding this.

suyam Pirakasam

suyam Pirakasam (Querist)

02 July 2025 I am having a House property with a rental income of Rs 1.20 lacs per annum. I availed a loan from a bank and paid interest on the home loan. I am filing IT return under the new regime.
I understand that the net loss after adjustment of rental income (Net Annual Value) to interest paid to adjusted against Gross income from salaries is not permissible. However, section 24 permits interest on a home loan can be allowed where the house property is let out without any maximum.

I shall thank you if you could clarify with relevant sections of IT Act whether interest paid on a home loan is permitted as an allowable deduction for FY 2024-25

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

03 July 2025 Deduction for interest on home loan is not allowed for self-occupied property under the new regime.
However, if the property is let out or deemed let out, interest deduction is allowed only up to the amount of rental income (not beyond that).

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

26 September 2025 Good luck...

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