What is the deduction limit for Principal on Home Loan u/s 80C?

A home loan is made up of two components: Principal and Interest. The principal is the amount borrowed. Whereas, the interest amount is the cost or borrowing the principal.

You can claim a deduction for principal repayment of Home Loan u/s 80C. The maximum threshold for this deduction is INR 1.5 Lakh.

To claim this deduction you need to satisfy the following conditions:

• The Home Loan must have been taken for the purpose of purchase or construction of a new property.
• You must not sell the property until five years of taking possession. If you do so, the deductions for repayment which are already taken will be added back to your taxable income in the year of sale.