Some taxpayers filing income tax returns for assessment year 2026-27 may notice that the field for claiming home loan interest on a self-occupied house is disabled in the ITR utility. According to reports from Business Standard, this change is linked to the tax regime selected while filing the return. Under the new tax regime, which is the default regime for individual taxpayers, deductions for home loan interest on a self-occupied house are not available, causing the ITR utility to automatically disable the relevant field.
The tax benefit on a home loan depends not only on the tax regime but also on whether the property is self-occupied or rented out. As reported by Business Standard, under the old tax regime, a borrower with a self-occupied house can claim a deduction of up to ₹2 lakh on home loan interest under Section 24(b). In addition, principal repayment may qualify for deduction of up to ₹1.5 lakh under Section 80C, subject to overall limits. This could reduce taxable income by as much as ₹3.5 lakh, translating to an annual tax saving of around ₹1.05 lakh for someone in the 30% tax bracket.
Tax experts recommend several verification steps before assuming there is a problem with the filing utility. According to Parag Jain, tax head at 1 Finance, taxpayers should first confirm which tax regime has been selected in the return. As reported by Business Standard, experts advise checking whether the property has been correctly classified as self-occupied or let out in the house property schedule, as wrong selection can affect deduction availability. They also recommend downloading the latest version of the ITR utility, as the Income Tax Department periodically releases updates during the filing season.
Experts say taxpayers who have accidentally chosen the wrong tax regime may still have an opportunity to correct the mistake. According to reports from Business Standard, if the return has not yet been submitted, the regime selection can be changed before filing. For already filed returns, salaried taxpayers without business income can generally file a revised return under Section 139(5), provided they meet prescribed conditions and timelines. However, taxpayers intending to opt for the old regime must exercise that option within the original due date for filing the return.
Experts identify several common mistakes that can invite scrutiny in home loan deduction claims. As reported by Business Standard, some common errors include claiming Section 24(b) deduction for a self-occupied house while filing under the new regime, incorrectly classifying property as self-occupied or let out, and claiming interest that does not match home loan interest certificate. Taxpayers should also verify that mandatory home loan details are complete in the ITR and compare tax savings under both regimes before filing, as lower tax rates under the new regime may outweigh old regime deductions in some cases.
