The ₹3.5 Lakh Question Nobody's Asking
Last week, two friends bought identical 3BHK flats in the same Raipur project. Same builder, same floor plan, same price: ₹35 lakhs.
One year later: Actual cost of friend #1: ₹35 lakhs
Cost to Friend #2: ₹ 31.5 lakhs
Same property. ₹3.5 lakh difference.
What was different?
Friend #2 knew how to take advantage of the tax benefits.
Friend #1 didn’t know the benefits existed.
If you are planning to buy property, then the government is literally offering you lakhs in tax savings.
But here is the catch: most buyers only discover these benefits AFTER they have already made the purchase. By that time, it’s already too late to maximize such benefits.
This guide changes that. By the time you finish reading, you’ll know exactly how to save ₹3-5 lakhs on your home purchase-completely legally.
Let’s break it down
Why March 31 Matters More Than You Think
The financial year of India starts on April 1 and ends on March 31.
Your tax benefits are calculated based on the financial year.
What this means for you is this:
You can claim a deduction for FY 2025-26 in case you purchase property and complete certain steps before the 31st day of March 2026.
Wait until April 2026? You’ll have to wait another full year, more until March 2027, until you can collect the same benefits.
Time literally equals money here.
Let’s see exactly how much.
Tax Benefit #1: Section 80C Deduction (Save up to ₹1.5 Lakhs)
What it is:
Numbers:
- Maximum deduction: ₹1.5 lakh per year
- Tax Bracket (30%): ₹46,500 saved per annum
- Tax bracket (20%): Save ₹31,000 annually
- Tax bracket (10%): Save ₹ 15,500 annually
Real Example:
Priya took a home loan of ₹25 lakhs at 8.5% interest for 20 years.
Her EMI: ₹21,800/month
During the first year, about ₹80,000 is paid for the principal amount.
She can claim this ₹80,000 under Section 80C.
At the 30% tax bracket, she saves ₹24,000 in taxes.
Over 20 years of loan tenure, she’ll save lakhs just from this benefit.
Important Conditions:
The property must be acquired or constructed.
The loan must be from a recognised financial institution
You have to be the owner of the property.
Stamp duty and registration charges are also eligible under 80C, but within the ₹1.5L limit.
Pro Tip:
Book property in January-February 2026 and get possession in March 2026. You can claim stamp duty and registration charges in the very same FY 2025-26, even before your loan EMIs have begun.
Tax Benefit #2 - Section 24(b) Deduction-up to ₹2 Lakhs can be saved:
What is it?
Section 24(b) allows you to claim a deduction on the interest portion of your home loan EMI.
Numbers:
- Self-occupied property: Deduction up to ₹2 lakh per annum
- Let-out property: No upper limit – full interest is deductible
- Tax Bracket: 30% – saves up to ₹62,000 every year
- Tax bracket (20%): Can save as much as ₹ 41,000 annually
Real Example:
- Continuation of Priya’s story:
- EMI: ₹21,800/month
- First year interest component: ₹2,10,000 (approx.)
- She can claim ₹2,00,000 under Section 24(b) – capped at ₹2L for self occupied
- At 30% tax bracket, she saves: ₹62,000 in taxes
- Added to Section 80C, ₹24,000, her tax savings (first year): ₹86,000
Conditions:
The provision must be fully constructed within 5 years from the date of loan sanction.
You have to take the possession certificate.
FOR UNDER CONSTRUCTION PROPERTY, FULL BENEFIT STARTS ONLY AFTER POSSESSION
The Twist Under Construction:
In the case of a property under construction, you can claim interest; however, this can only be done after the possession.
The interest paid during construction gets accumulated and can be claimed in 5 equal installments starting from the year of possession.
Example: Paid ₹5 lakhs interest during 3-year construction period? Claim ₹1 lakh each year for 5 years after possession.
Tax Benefit #3: First-Time Home Buyer Benefit - Section 80EEA (Additional ₹1.5 Lakhs!)
What It Is:
This is an extra benefit only for first-time home buyers, and hardly anybody knows that.
The Numbers:
Additional deduction: Up to ₹1.5 lakh on home loan interest
This is OVER AND ABOVE the limit under Section 24(b)
Total interest deduction possible: ₹2L 24(b) + ₹1.5L 80EEA = ₹3.5L
Eligibility Conditions:
You are a first-time home buyer, and neither you nor your spouse owns any other residential property.
The loan amount is ₹35 lakhs or less.
Property value is ₹ 45 lakhs or less.
The loan was sanctioned between April 1, 2019, and March 31, 2025 (check the latest extensions).
It is in the affordable housing segment.
Real Example:
Amit is buying his first home for ₹ 40 lakhs on a loan for ₹ 30 lakhs.
Interest for Year 1: ₹2.5 lakhs
He can claim:
- Section 24(b) : ₹2 lakhs
- 80EEA: ₹1.5 lakhs
- Section 80C: ₹1.5 lakhs (principal)
Total deduction: ₹5 lakhs
At 30% tax bracket: He saves ₹1,50,000 in taxes in Year 1 alone!
The March 31 Timeline: What You Need to Complete
In fact, for maximum benefits to be availed in the FY 2025-26 book of accounts, here is what should take place no later than March 31, 2026:
For Ready-to-Move Properties:
Before Dec 31, 2025: Property booking and finalization of loan.
Registration (before Feb 15, 2026)
Before 31 March 2026: Commence EMI payments (even if only one EMI).
This way, you would say:
- Stamp duty & registration under 80C
- First EMI’s interest under 24(b)
- Principal repayment under 80C
For properties that are under construction:
- Pay the booking amount and all construction-linked payments before March 31, 2026.
- Stamp duty and registration charges paid this FY can be claimed under 80C
- Interest benefit starts only after possession, but gets accumulated meanwhile.
Common Mistakes That Cost Buyers Lakhs
Mistake #1: Not Coordinating Timing of Possession
Buyers get possession in April – just missing March 31 – and lose a whole year of benefits.
Solution: If possession is expected around March-April, coordinate with builder to prepone documentation to late March.
Error #2: Not claiming for stamp duty & registration
These are BIG amounts (₹ 2-3 lakhs usually) that go under Section 80C.
Solution: Keep all receipts of payment. Claim them in the year of payment.
Mistake #3: Joint Loans Without Joint Ownership
If the loan is joint, but the property is in one single name, then only he/she gets the tax benefits.
Solution: Make the ownership of the property joint so that both borrowers can claim full benefits individually.
Mistake #4: Renting Out Without Understanding the Benefits
Renting out your property changes the calculation of taxes, sometimes in your favor!
Solution: Consult a CA before deciding to rent or self-occupy.
The Real Math: How Much Will YOU Save?
Now, let’s calculate it for a typical homebuyer in Raipur:
Scenario:
Property value: ₹35 lakhs
Loan amount: ₹25 lakhs @ 8.5% for 20 years
First-time buyer
Tax Bracket: 30%
Year 1 Deductions:
Principal Repaid (80C): ₹ 80,000
Stamp duty & registration (80C): ₹ 70,000 (within 1.5L limit)
Interest paid: – (24b): 2,10,000 ₹ 2,00,000 to be claimed
Additional first-time benefit u/s 80EEA: ₹1,50,000
Total deduction: ₹5,00,000
Tax saved at 30%: ₹1,50,000
More than 20 years: Conservatively ₹ 10-12 lakhs savings on taxes
Your Action Plan Before March 31
If You’re Buying Ready-to-Move:
By Jan 15: Finalize property and apply for a home loan
By Feb 28: Complete registration formalities
By March 15: Ensure first EMI is processed
Before April 15: File ITR claiming all deductions
If You’re Buying Under Construction:
By Feb 15: Book property, pay booking amount + registration
Keep records: All payment receipts for future claims
Plan possession: Coordinate with builder for FY-end possession if possible
Calculate YOUR Exact Savings
Every buyer’s situation is different. Your savings depend on:
- Your loan amount
- Your tax bracket
- Property value
- First-time buyer status
- Possession timing
We offer a FREE Tax Benefit Calculator session where we:
- Calculate your exact tax savings
- Show you the best timeline to maximize benefits
- Explain documentation needed
- the Connect you with CAs if needed
Calculate Your Savings + Book Consultation
Comment “TAX” below or DM us directly.
Because ₹3-5 lakhs in savings isn’t “nice to have”—it’s yours to claim.
Final Thought
The government is literally offering you lakhs in tax benefits.
But benefits don’t claim themselves. Properties don’t buy themselves. Deadlines don’t extend themselves.
March 31, 2026 is approaching.
The question is: Will you be the buyer who maximizes every rupee of benefit? Or the one who discovers this article in April 2026 wishing they’d acted sooner?
Your tax savings start with today’s decision.
Let’s make it count.
Disclaimer: Tax laws are subject to change. This guide is for informational purposes. Please consult a qualified Chartered Accountant for personalized tax advice based on your specific situation.