The Economic Times

Confused about income tax deduction on pre-EMI interest? Budget 2026 brings clarity on Rs 2 lakh home loan deduction

Budget 2026 brings clarity on home loan tax deductions. Prior-period interest on home loans is now explicitly included within the Rs 2 lakh deduction limit for self-occupied properties. This amendment aligns the new Income Tax Act with previous rules. Taxpayers can now understand the total interest deduction cap more clearly. The overall tax benefit for most homeowners remains unchanged.