Tax Benefits Every Homebuyer Should Know Before Investing in Property in 2026

Buying a home is not only an emotional milestone, it is also a smart financial move. Apart from creating long-term wealth, property investment in India comes with several tax benefits for home buyers. These benefits can make a big difference in affordability, especially for people taking home loans.
If you are planning to buy a house in 2026, understanding the tax benefits on home loans and property investment tax benefits can help you make better financial decisions. This blog explains all the important deductions that apply across India, along with specific guidance for homebuyers in Mumbai and Maharashtra.
(All information is based on income tax rules for FY 2025–26. Buyers should consult a tax advisor for individual advice.)

1. Section 80C – Tax Deduction on Home Loan Principal and Registration

→ Pan-India

Section 80C of the Income Tax Act allows a deduction of up to ₹1.5 lakh per financial year on the principal amount you repay on your home loan. You can also claim a one-time deduction for stamp duty and registration charges in the year you pay them. Conditions

• You can claim this only after taking possession of your property.
• You cannot sell the property within five years of purchase.
• This benefit is available only under the old tax regime.

Example If your EMI includes ₹10,000 per month towards principal repayment, you can claim ₹1.2 lakh for the year under Section 80C.

→ Mumbai and Maharashtra

In Mumbai and Maharashtra, stamp duty is 5–6 percent, plus a 1 percent registration fee. For example, if you buy a flat worth ₹1 crore in Mumbai, you might pay ₹6–7 lakh in stamp duty and registration. Claiming part of this under Section 80C can help you recover a good portion of this cost through tax savings. For Mumbai homebuyers, this deduction is especially useful because property registration costs are among the highest in the country.

2. Section 24(b) – Deduction on Interest Paid on Home Loan

→ Pan-India

Section 24(b) allows homebuyers to claim deductions on the interest portion of their home loan EMIs.

• For self-occupied property, the deduction limit is ₹2 lakh per year.
• For rented-out property, there is no upper limit on the interest deduction. However, only ₹2 lakh can be adjusted against your total income in a year.
• The property must be completed within five years of taking the loan.

Example If your total annual interest is ₹2.5 lakh, you can claim ₹2 lakh under Section 24(b).

→ Mumbai and Maharashtra

In cities like Mumbai, home loans are often large because of higher property prices. Suppose you take a ₹75 lakh loan at an interest rate of 8.5 percent. Your yearly interest would be around ₹6.3 lakh. By claiming ₹2 lakh as a deduction, you could save around ₹60,000 in tax every year, depending on your tax bracket.
For many homebuyers in Mumbai, this is one of the most valuable tax benefits on home loan interest.

3. Sections 80EE and 80EEA – Additional Tax Benefits for First-Time Home Buyers

→ Pan-India

If you are a first-time homebuyer, you can claim extra benefits under Sections 80EE and 80EEA.

• Section 80EE provides an additional ₹50,000 deduction on interest for loans sanctioned between April 2016 and March 2017.
• Section 80EEA offers an extra ₹1.5 lakh deduction for loans sanctioned between April 2019 and March 2022 for properties valued up to ₹45 lakh (stamp duty value).

You can still claim these if your loan falls within those dates, even in FY 2025–26, until the loan is fully repaid. Example If you are a first-time buyer and your loan qualifies under 80EEA, you can combine this with Section 24(b) to claim up to ₹3.5 lakh in annual deductions on interest.

→ Mumbai and Maharashtra

Affordable homes in suburbs like Dombivli, Vasai-Virar, Ambernath, Kalyan, and Panvel often qualify under this section. A first-time buyer purchasing a ₹45 lakh flat can easily save ₹70,000–₹1 lakh each year in taxes.

4. Joint Home Loans – Doubling the Tax Savings

→ Pan-India

If two or more people buy a property together and are co-borrowers, both can claim deductions on the loan.

• Up to ₹2 lakh each under Section 24(b) for interest.
• Up to ₹1.5 lakh each under Section 80C for principal repayment.

Example A husband and wife paying a combined EMI of ₹50,000 per month can claim around ₹7 lakh in total deductions if both are co-owners and co-borrowers.

→ Mumbai and Maharashtra

Joint loans are common among Mumbai families due to high property prices. For example, a couple purchasing a ₹1 crore apartment in Thane can save over ₹1 lakh per year in combined tax benefits, making joint ownership a smart financial move.

5. Pre-Construction Interest Deduction

→ Pan-India

If you buy an under-construction property, you may start paying EMIs before you get possession. The interest paid during this period is called pre-construction interest. You can claim this in five equal yearly installments after you receive possession. Example If you paid ₹5 lakh as pre-construction interest, you can claim ₹1 lakh each year for five years after getting possession.

→ Mumbai and Maharashtra

Since many Mumbai projects are under construction, this rule helps buyers of upcoming developments. If you book a home in 2024 and get possession in 2026, you can start claiming the pre-construction interest from FY 2026–27 onwards.

6. Capital Gains Exemptions on Property Sale

→ Pan-India

When you sell a property, you may have to pay Capital Gains Tax. However, the Income Tax Act provides some reliefs:

• Section 54: No tax if you reinvest the sale proceeds in another residential property within two years (or construct within three years).
• Section 54EC: You can invest up to ₹50 lakh in specific government bonds like NHAI or REC to avoid tax.
• Section 54F: If you sell another asset (like shares) and buy a house, you can also get an exemption.

→ Mumbai and Maharashtra

These benefits are very helpful for Mumbai homeowners upgrading from old flats to new ones. For instance, selling a Goregaon flat bought in 2015 and investing the gains in a new Right Channel property within two years can help you avoid paying capital gains tax.

7. Property Tax and Municipal Deductions

→ Pan-India

Property owners who earn rental income can deduct municipal taxes paid from that income. After deducting property tax, a standard 30 percent deduction applies to the net amount, which further reduces taxable income.

→ Mumbai and Maharashtra

In Mumbai, property tax is paid annually to the Brihanmumbai Municipal Corporation (BMC). Make sure to keep payment receipts because they are required when claiming this deduction. Paying your property tax on time also avoids penalties.

8. HRA and Home Loan Deduction Together

→ Pan-India

Many salaried people wonder if they can claim both House Rent Allowance (HRA) and home loan tax benefits. The answer is yes, if certain conditions are met. You can do this if you live in a rented home but have bought another house in a different city or far from your workplace.

→ Mumbai and Maharashtra

For example, if you work in Bandra but own a house in Kalyan, you can claim both benefits. You need valid rent receipts and loan repayment documents. This rule is very useful for Mumbai professionals who work in central locations but prefer living in rented homes closer to their offices.

9. Choosing Between Old and New Tax Regime

→ Pan-India

Since 2023–24, the new tax regime has become the default option. However, it does not allow popular home loan tax benefits such as Section 80C or Section 24(b) for self-occupied homes.

Benefit	Old Regime	New Regime
Section 80C (Principal)	Allowed	Not allowed
Section 24(b) (Interest, self-occupied)	Allowed	Not allowed
Section 24(b) (Let-out)	Allowed	Not allowed
80EE / 80EEA	Allowed	Not allowed
Capital Gains Exemption	Allowed	Not allowed

You can still choose the old regime while filing your tax return if it gives you higher savings.

→ Mumbai and Maharashtra

Most buyers in Mumbai choose the old regime because their loan amounts are large. The deductions available under 80C and 24(b) often lead to higher savings compared to the new regime.

10. Maharashtra Stamp Duty and Registration Charges

→ Pan-India

Stamp duty and registration charges vary from state to state. They are decided by each state government.

→ Mumbai and Maharashtra

As of 2025, the rates in Maharashtra are:

• 5 percent stamp duty for male buyers within Mumbai limits.
• 4 percent for female buyers. (inclusive of a 1% metro cess)
• 1 percent registration fee for all.

The state sometimes offers discounts for first-time or women buyers. Always check the IGR Maharashtra website before registration for updated rates.

11. How Developers Like Right Channel Help You Save

When you invest through a reliable real estate developer in Mumbai, you get complete documentation that makes claiming tax benefits easier.

• RERA-registered projects ensure clear possession dates, which are required for 80C and 24(b) claims.
• Ready-to-register properties allow faster tax deductions for stamp duty.
• Transparent pricing and loan assistance help buyers plan their taxes efficiently.

Right Channel, one of the best builders in Mumbai, helps homebuyers understand both their property and financial benefits.

Conclusion – Plan Smart, Save More

Knowing your tax exemptions on real estate investment is the first step to becoming a smart homeowner. From Section 80C to 24(b) and capital gains exemptions, the government gives you multiple ways to save money.
For homebuyers in Mumbai, these benefits are even more valuable because property costs are higher. Planning your purchase and tax strategy carefully can save several lakh rupees every year.
If you are ready to invest in 2026, explore projects by Right Channel, among the top builders and developers in Mumbai. With transparent dealings, expert support, and a focus on financial clarity, Right Channel helps you make the Right Choice for your dream home.