OPEN APP
Home / Money / Personal Finance /  Switching to new tax regime? You can still claim deduction on home loan interest
Listen to this article

Beginning this assessment year, taxpayers will have the option to choose between old and new tax regime for the purpose of filing their income tax return (ITR). The new tax structure, introduced in Budget 2020, does away with 70 odd tax deductions and exemptions and lowers tax rates for annual incomes up to 12.5 lakh.

Despite the major deductions on investments under Section 80C, House Rent Allowance (HRA), standard deduction of 50,000 and medical insurance premium, among others gone, not all is lost for taxpayers who are mulling opting for the new tax regime.

One such important deduction available is on interest paid on a home loan taken for a rented-out property. “The rule foregoes tax benefit on a home loan on a self-occupied property. The tax rules still allow deduction on interest paid towards loan on a rented property under section 24(b)," said Karan Batra, founder, charteredclub.com.

Another important tax benefit allowed under the new tax structure is deduction on employer’s contribution in National Pension Scheme (NPS) under section 80CCD (1B).

Similarly, maturity proceeds and accumulated interest from PPF and Sukanya Samriddhi Yojana (SSY) will continue to be tax exempt. The new tax regime has only foregone deduction benefit on contributions made on these two investment options.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout