If you’re planning to buy your first home, It will be good to know that there are still several financial, tax, and policy benefits available. But there’s also a lot of confusion because some old tax sections expired, while others are still active. Here’s a clear breakdown.
Lower Interest Rates for First-Time Buyers
Many banks offer slightly lower home loan interest rates for first-time buyers, especially in the affordable housing segment. Even a 0.10–0.20% difference can help you save lakhs over the loan period.
PMAY Subsidy
The earlier MIG subsidy ended in 2021, but the government introduced PMAY-U 2.0 (2024) with renewed benefits.
If you don’t own a pucca house anywhere in India, you may qualify for:
- Interest subsidies
- Lower EMI burden
- Priority under affordable housing
This is currently the main government benefit for new first-time buyers.
Tax Benefits You Can Still Claim
Section 80C – Principal, Stamp Duty & Registration (Active but ONLY under Old Regime)
Section 80C allows you to claim up to ₹1.5 lakh for:
- Home loan principal repayment
- Stamp duty
- Registration charges
But here’s the important catch:
This benefit is available ONLY under the Old Tax Regime.
- If you choose the New Tax Regime (default in India now):
- You cannot claim Section 80C
- No deduction for principal, stamp duty, or registration
Extra Detail:
- Stamp duty and registration can be claimed only in the year you actually pay them.
- If you miss claiming them that year, you cannot claim them later.
Section 24(b) – Home Loan Interest Deduction
- Self-Occupied Property
- Deduction limit: ₹2 lakh per financial year
- Status: Available only under the Old Tax Regime
If you're under the New Tax Regime: The ₹2 lakh interest deduction for self-occupied homes becomes zero.
Tax Benefits That Are No Longer Available
1. Section 80EE – Expired
- Gave ₹50,000 extra deduction
- But, still available to claim for those who already have an eligible loan.
2. Section 80EEA – Expired
- Gave ₹1.5 lakh extra deduction
- Only for loans sanctioned between 2019–2022
➡ Not applicable for new loans in 2025–26.
Other Practical Benefits for First-Time Buyers
- Easier approvals for ready-to-move and affordable units
- Developer offers targeted at first-time buyers (waived stamp duty, free interiors, etc.)
- Better loan approval chances due to stable salaried income profiles of most first-time buyers
Note on Changing Tax Rules
Tax sections like 80EE and 80EEA were limited to specific loan sanction periods and are no longer active.
Always check the current year’s Union Budget for the latest updates.
