Real estate ownership and investments always rank high on every individual’s wish list. With the thrust on affordable housing for all, shelter and housing needs have taken centre stage in recent years. As one of life’s basic necessities, house purchases consistently remain on an upswing, which is why, the Indian government incentivises housing finance by providing substantial tax relief, especially to first-time homebuyers and women house owners, making it easier to avail of a property by lowering the burden of debt.
Here is a detailed look at the various first-time homebuyer benefits and how one may claim them.
Who is Considered a First-Time Homebuyer?
Contrary to popular belief, a first-time homebuyer is not necessarily someone who purchases a house for the first time. Individuals who have not bought a primary property in the last three years may be termed first-time homebuyers.
Benefits for First-Time Homebuyers
If you wish to avail of housing finance for buying a new house, you can enjoy a number of tax benefits on Home Loans under the Income Tax Act. Eligible loan borrowers may claim these concessions on the principal and interest components of their loan at the time of filing their income tax returns during each financial year. Given below are some of the provisions that permit combined tax savings up to Rs. 5 lakh annually under Section 80 C, Section 24 (b), Section 80 EE and Section 80 EEA:
Deduction of Principal Amount Under Section 80 C
Borrowers are entitled to tax relaxations up to Rs. 1.5 lakh on the principal repayment of their house loans.
Tax Deduction on Interest Paid Under Section 24 (b)
Housing loan interest paid up to Rs. 2 lakh is deductible from the gross total income while calculating income from self-occupied house properties. This is applicable in cases where the acquisition or construction of the house has been completed within five years of originally taking the loan.
Extra Tax Relief Under Section 80 EEA and Section 80 EE
First-time homeowners under the affordable housing category can claim additional deductions under Section 80 EE and Section 80 EEA of Rs. 50,000 and Rs. 1.5 lakh, respectively, on the interest portion of their loan EMI repayment, subject to fulfilling certain conditions. However, you can obtain exemptions only under one of the two sections depending on when the loan was sanctioned.
Below is a comparison of the basic difference between the two sections:
Particulars | Section 80 EE | Section 80 EEA |
---|---|---|
Maximum deduction limit | Rs. 50,000 (on the interest component of the loan EMIs paid in a year) | Rs. 1.5 lakh (only on the interest portion of the EMIs paid annually) |
Applicable to | Home Loans availed in FY 2016-17 | House loans secured between 2020 to 2022 |
Other conditions |
|
|
Tax Concession for Non-Receipt of House Rent Allowance (HRA)
Individuals who buy a house for the first time can secure rebates under Section 80 GG if they are not entitled to HRA from their employers. This provides relief on expenses exceeding 10% of total income towards their rent payment.
Deduction on GST
A 12% subsidy, previously levied on houses acquired under the Pradhan Mantri Awas Yojana, has been reduced to 8% since 2018. This means that first-time homeowners with average earnings of Rs. 18 lakh can enjoy benefits up to Rs. 2.7 lakh instead of the earlier sum of Rs. 2.5 lakh.
Deduction on Subsidy Slabs
As part of the Pradhan Mantri Awas Yojana subsidies, home buyers with an annual income of Rs. 12 lakh can claim a 4% subsidy on principal amounts of Rs. 9 lakh. Besides that, a 3% subsidy is extended on Rs. 12 lakh principal sum for a salary of Rs. 18 lakh per year.
Pradhan Mantri Awas Yojana (PMAY)
First-time home buyers belonging to the Economically Weaker Sections (EWS), Lower Income Groups (LIG) and Middle-Income Groups (MIG) can claim the following tax concessions on Home Loans under PMAY:
Income Group | Limit of Loan Grant | Income Eligibility | Subsidy on Interest |
---|---|---|---|
EWS | Up to Rs. 6 lakh | Earnings below Rs. 3 lakh per annum | 6.5% on interest |
LIG | Up to Rs. 9 lakh | Annual income under Rs. 6 lakh | 4% on interest |
MIG | Up to Rs. 12 lakh | Annual salary less than Rs. 12 lakh | 3% on interest |
Smart Advice To Help You Plan Your First Home Purchase
Purchasing your first home involves judicious planning and utilisation of the available funds. When looking for the ideal home, one usually considers these crucial aspects:
- Location and neighbourhood
- Property price
- Construction quality
- Amenities, conveniences and infrastructure
- Facilities, connectivity, etc.
Selecting the right property is just one facet of your home-buying plans. Below is a quick guide on several other considerations:
Arranging the Requisite Funds
Your financial profile should always strike a balance between your savings and the debts you undertake. While paying for the house with your own investments and monetary resources is the ideal option, diluting all your savings is never a good idea. Besides, one needs to ensure sufficient liquidity for adverse situations.
Opting for a Home Loan
In case you find it difficult to manage the entire property purchase on your own, you may opt for housing finance. But before you take up a Home Loan, get a fair estimate of how much loan you might be eligible for and whether you can make the repayments comfortably.
Home Loan Eligibility
While examining loan eligibility, lending institutions will closely evaluate multiple aspects, each of which might act as a deciding factor on its own. These include:
- Credit score and repayment history
- Age of the applicant
- Business/job profile
- Monthly income
- Existing liabilities
- Property details, etc.
If your credit score is low, lenders will be wary of offering you a loan. However, a good credit record and excellent CIBIL scores of 750 or higher will establish you as a responsible borrower who can repay loans on time, thereby fetching you attractive deals at competitive interest rates.
Similarly, younger loan applicants are far likelier to receive preferential loan offerings as compared to older applicants who may be nearing the end of their service years. Other parameters are also carefully appraised to verify your personal, professional and credit profile to assure lenders of your repayment abilities within the stipulated tenure.
Property Value
As per the Reserve Bank of India norms, you can secure a specific proportion of the property’s current market price as a loan, better known as loan-to-value ratio (LTV). The RBI-mandated LTV restrictions for determining principal amounts are as follows:
- When you apply for a loan of Rs. 30 lakh, you can receive approvals up to 90% of the property’s value
- Borrowers can expect housing finance up to 80% if they seek loan principals in the range of Rs. 30 lakh to Rs. 75 lakh
- For loan amounts higher than Rs. 75 lakh, the expected LTV is 75%
Note: Keeping in mind the risks associated with credit transactions, lenders may reduce the LTV.
Summing Up
As a first-time homebuyer, research your property options in line with your loan eligibility and requirement to maximise the loan benefits. See if you qualify for any government housing schemes. If you wish to avail of a Home Loan, remember to first scout around for lenders offering the lowest Home Loan interest rates. Access a Home Loan EMI calculator to compare the interest rates of other lenders for choosing the best deal. Confirm if there are other related costs and factor them into your calculations. This way, you can establish the overall cost of your credit and its viability.
DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.
Frequently Asked Questions:
First-time home buyers can save money for purchasing a house in the following ways:
- Open a high-interest savings account
- Invest in government schemes or mutual funds
- Avoid unnecessary expenses
- Pay off existing debts
- Place your surplus earnings, bonuses, etc. in a separate fund
No. As a first-time buyer, you are required to pay stamp duty charges, which can be later claimed to the tune of Rs. 1.5 lakh under Section 80C of the Income Tax Act. You can avail this deduction while filing your annual income tax returns.
First-time homebuyers can secure additional tax exemptions up to Rs. 1.5 lakh under Section 80 EEA for affordable housing, which is over and above the usual deduction of Rs. 2 lakh under Section 24. However, if they have already secured the benefits under Section 80 EE, they cannot be deemed eligible for claiming the advantages under Section 80 EEA.
Trending Articles

home+loan Home Loan
[N][T][T][N][T]
Should You Take a Home Loan Even If You Have Enough Money to Buy a House?2024-01-30 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Property Search Guide for First-Time Homebuyers2025-05-20 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Loan Against Property: A Balanced Approach to Financing2025-05-20 | 3 min

tax Tax
[N][T][T][N][T]
How to Reduce the Loan Against Property Interest Rate?2023-12-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Making the Shift: Benefits of Moving from Pre-EMI to Full EMI in a Home Loan2025-05-20 | 4 min

cibil Cibil
[N][T][T][N][T]
Loan Rejection Impact on CIBIL Score2024-12-23 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Pay Off Your Home Loan Quicker2024-03-11 | 4 Min

[N][T][T][N][T]
NRI Home Loans: 5 Things to Keep in Mind Before Applying2024-02-15 | 4 min

[N][T][T][N][T]
7 Benefits of Taking a Home Loan in India2024-06-19 | 3 min

cibil Cibil
[N][T][T][N][T]
Everything You Should Know About Your CIBIL Score2024-02-09 | 7 min

home+loan Home Loan
[N][T][T][N][T]
How to Calculate Home Loan EMIs2022-06-14 | 5 Mins

home+loan Home Loan
[N][T][T][N][T]
How to Pick the Best Home Loan Tenure that Suits Your Budget2023-06-29 | 5 min

cibil Cibil
[N][T][T][N][T]
Does CIBIL Score Affect Loan Against Property Eligibility?2023-02-15 | 7 min

home+loan Home Loan
[N][T][T][N][T]
Secured vs Unsecured Loan - Know the Difference2023-08-24 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
5 Important Reasons to Opt for a Loan Against Property to Start Your Own Business2023-02-10 | 2 min

cibil Cibil
[N][T][T][N][T]
Ways You Can Improve your Credit Score for a Small Business2023-03-01 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan for Self-Employed: Three Steps to Improve Your Approval Chances2025-03-12 | 5 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Everything You Wanted to Know About Loan Against Property2023-12-16 | 5 Min

loan+against+property Loan Against Property
[N][T][T][N][T]
Step-by-Step Process How to Apply for a Loan Against Property2024-03-05 | 4 Min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding the Fees and Charges on Your Loan Against Property2024-02-16 | 8 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Top Benefits of a Loan Against Property Over Collateral-Free Loans2024-01-09 | 4 min

[N][T][T][N][T]
7 Smart Ways to Optimise Your Home Loan Interest Repayments2025-04-03 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding the Benefits of a Home Loan EMI Calculator2023-07-12 | 5 min

cibil Cibil
[N][T][T][N][T]
Minimum CIBIL Score for Business Loans2023-04-17 | 5 min

cibil Cibil
[N][T][T][N][T]
Reasons to Maintain a Positive Credit Profile and a High CIBIL Score2023-03-01 | 5 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Why Professional Loans Against Property Are Financially Beneficial?2023-03-03 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan EMI Calculator Benefits and It’s Features2024-02-21 | 4 min

[N][T][T][N][T]
What is the Purpose of CIBIL Score?2023-03-25 | 4 min

cibil Cibil
[N][T][T][N][T]
Importance of CIBIL Score & Tips To Improve It2023-02-21 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Smart Things to Consider Before You Apply for a Home Loan2022-12-14 | 5 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Why Loan Against Property Can be a Good Credit Option for a Startup Business?2023-12-22 | 5 Min

home+loan Home Loan
[N][T][T][N][T]
Understanding Sale Deed in Home Loans: Why It Matters2025-05-12 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Smart Home Loan Planning After 45: Tips and Strategies2025-05-13 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Reasons Why a Housing Loan Application May Be Rejected2024-02-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Top 5 Home Loan Benefits for First-time Woman Buyers2024-05-14 | 5 min

home+loan Home Loan
[N][T][T][N][T]
How to Choose the Best Home Loan?2023-08-09 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Tips to Avoid Rejection of Your Home Loan Application2023-08-01 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan for Rs.70,000 Salary: How Much Can You Borrow?2025-03-18 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loans for Salaried Employees: Eligibility, Documents, and Application Process2025-03-18 | 3 min

[N][T][T][N][T]
Home Loan for Pensioners: Eligibility and Benefits2025-03-11 | 3 min

tax Tax
[N][T][T][N][T]
How Much Tax Can be Saved Under Sections 80C, 80D, and 80G?2024-05-15 | 5 min

home+loan Home Loan
[N][T][T][N][T]
What is the Ideal Age to Buy a House?2025-03-19 | 2 min

tax Tax
[N][T][T][N][T]
Difference Between Old vs. New Tax Regime2024-08-22 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Consider These Factors Before Foreclosing Your Home Loan2024-04-16 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding the Mortgage Loan Underwriting Process: What You Should Know2025-05-12 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding How Home Loan Interest Rates Are Determined2025-05-12 | 5 min

[N][T][T][N][T]
5 Benefits of Availing of a Home Loan at an Early Age2024-05-10 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Benefits of a Home Loan2023-02-20 | 4 min

cibil Cibil
[N][T][T][N][T]
Here’s What You Can Do to Improve Your CIBIL Score2023-03-16 | 4 min

tax Tax
[N][T][T][N][T]
What Does It Mean to Have a CIBIL Score of -12023-06-16 | 4 min

cibil Cibil
[N][T][T][N][T]
Why Is It Important to Check Your Credit Report and How Often?2023-03-22 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Stamp Duty and Property Registration Charges2024-03-13 | 5 min

cibil Cibil
[N][T][T][N][T]
What Does a Zero or Negative Credit Score Mean?2023-02-24 | 4 min

tax Tax
[N][T][T][N][T]
What is a Property Tax in India and How is It Calculated?2024-03-13 | 4 min

cibil Cibil
[N][T][T][N][T]
What's Considered a Healthy Credit Mix?2024-06-11 | 3 min

cibil Cibil
[N][T][T][N][T]
What Distinguishes CIBIL Score from CIBIL Report?2024-04-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
What Is a Pre-Approved Home Loan and How Should You Get It Done?2024-03-12 | 5 min

home+loan Home Loan
[N][T][T][N][T]
What is an NOC Letter and Why is it Important?2024-05-14 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
A Guide to Loan Against Property for Doctors2022-06-27 | 5 Min

home+loan Home Loan
[N][T][T][N][T]
What Is Home Loan Eligibility and How Is It Calculated2024-07-11 | 6 min

cibil Cibil
[N][T][T][N][T]
What Is Credit Utilization Ratio and How Can You Improve It?2024-03-22 | 5 min

cibil Cibil
[N][T][T][N][T]
What is Credit Score and Its Impact on Loan Availability2023-03-27 |

cibil Cibil
[N][T][T][N][T]
What Is Credit Mix and How Can It Help Your Credit Score?2023-07-12 | 3 min

cibil Cibil
[N][T][T][N][T]
What is CIBIL? Understand How It Works and Its Importance2024-01-31 | 6 min

home+loan Home Loan
[N][T][T][N][T]
What Do You Need to Know About Home Loan Foreclosure?2023-03-23 | 5 min

cibil Cibil
[N][T][T][N][T]
What Are Tradelines and How to Find Them On Your Credit Report?2024-05-28 | 4 min

home+loan Home Loan
[N][T][T][N][T]
5 Great Ways Women Can Benefit from Taking a Housing Loan2024-01-16 | 5 min

cibil Cibil
[N][T][T][N][T]
5 Ways to Increase CIBIL Score After Job Loss2023-03-21 | 4 min

cibil Cibil
[N][T][T][N][T]
Ways to Improve Your Credit Score with a Credit Card2024-02-02 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Loan Against Property for Doctors: Interest Rates and Charges2023-11-24 | 6 Min

home+loan Home Loan
[N][T][T][N][T]
Understanding Composite Home Loans: A Smart Financing Option for Plot and Construction2025-05-08 | 3 min

cibil Cibil
[N][T][T][N][T]
How to Check CIBIL Score Online?2023-03-14 | 5 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding the Fees and Charges on Your Loan Against Property2024-04-10 | 6 min

home+loan Home Loan
[N][T][T][N][T]
What are the Different Types of Loans Available in India?2024-01-02 | 5 Min

home+loan Home Loan
[N][T][T][N][T]
Types of Home Loan Charges2024-01-22 | 3 Min

loan+against+property Loan Against Property
[N][T][T][N][T]
Top 5 Issues Regarding Loan Against Property Application Rejection that You Might Face2023-02-14 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Conversion Charges Explained: What They Are and When They Apply2025-05-09 | 2 min

tax Tax
[N][T][T][N][T]
Tax Benefits on Home Loans for Self-Employed Individuals: What You Need to Know2024-06-07 | 4 min

[N][T][T][N][T]
Tips to Manage Loan Against Property Repayments Efficiently2024-02-21 | 3 min

home+loan Home Loan
[N][T][T][N][T]
5 Strategies to Manage High Home Loan EMIs Effectively2023-02-22 | 6 min

cibil Cibil
[N][T][T][N][T]
Top Tips to Improve Credit Score Immediately to Get Your Loan Approved2023-03-30 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Five Tips to Choose the Right Digital Platform for Home Loans2023-02-09 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Complete Guide to Securing a Attractive Interest on Home Loans2024-01-23 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Section 80EE: Claim Deductions on the Home Loan Interest Paid2024-04-25 | 6 min

home+loan Home Loan
[N][T][T][N][T]
10 Smart Steps for Effective Home Loan Management2024-02-16 | 5 min

cibil Cibil
[N][T][T][N][T]
How can I Remove Loan Inquiry from CIBIL Credit Report2024-01-22 | 5 min

[N][T][T][N][T]
What Is the OCR in a Home Loan? A Complete Guide2025-05-09 | 6 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding SDMC Property Tax: A Guide to Online and Offline Payment Methods2025-05-08 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Mortgage Loan Against Vacant Land: A Feasible Way to Unlock Property Value2025-05-05 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Stamp Duty and Registration Charges in Tamil Nadu2025-05-08 | 6 min

home+loan Home Loan
[N][T][T][N][T]
What Are Closing Costs? Understanding the Final Steps of a Home Purchas2025-05-07 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Need More from Your Home Loan? Here’s How You Can Optimise I2025-05-07 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
How to Apply for a Loan Against Property Online in Bangalore?2025-05-05 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Transfers: Unlocking Better Rates and Terms2025-05-07 | 2 min

[N][T][T][N][T]
Decoding Credit Scores: Understanding Their Role and Impact2025-05-05 | 4 min

[N][T][T][N][T]
The CIBIL Score Advantage for Loan Approval2025-05-05 | 7 min

home+loan Home Loan
[N][T][T][N][T]
Credit Score and High-Interest Rates: How They Can Affect Your Loan Journey2025-05-05 | 8 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding OTC and PDF in Loan Against Property2025-05-05 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Equitable Mortgage vs Registered Mortgage: Key Differences Explained2025-04-30 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Taking a Home Loan to Buy a Property for Investment? Here Are 5 Points to Consider2023-04-17 | 5 min

home+loan Home Loan
[N][T][T][N][T]
A Complete Guide on the Benefits of Joint Home Loan2022-11-16 | 5 min

home+loan Home Loan
[N][T][T][N][T]
4 Key Benefits of Home Loan Balance Transfer to Bajaj Housing Finance Limited2023-01-09 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Top Things to Keep Track of While Doing a Home Loan Balance Transfer2022-12-18 | 7 min

home+loan Home Loan
[N][T][T][N][T]
Importance Of a Good Credit Score in The Home Loan Process2023-03-20 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Transform Your Space with a Loan Against Property for Home Renovation2024-12-26 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
A Guide to Calculate Loan Against Property EMI2025-01-08 | 2 min

[N][T][T][N][T]
How to Choose the Right Home Loan2024-11-26 | 4 min

home+loan Home Loan
[N][T][T][N][T]
How to Determine Your Ideal Credit Score for a Home Loan?2024-03-28 | 4 min

[N][T][T][N][T]
Top 3 Reasons to Buy a Home Before You Reach 302024-12-11 | 3 min

cibil Cibil
[N][T][T][N][T]
Pay Minimum Amount Due on Your Credit Cards Will Impact Your Credit Score2024-03-11 | 5 min

cibil Cibil
[N][T][T][N][T]
Importance of CIBIL Score for Achieving Business Goals2024-03-13 | 5 min

[N][T][T][N][T]
3 Ways to Reduce Your EMIs with a Home Loan Balance Transfer2024-05-08 | 5 min

home+loan Home Loan
[N][T][T][N][T]
How to Calculate Your Home Loan Eligibility2025-03-05 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Top Benefits of Loan Against Property Over Collateral-free Loans2023-02-23 | 3 min

cibil Cibil
[N][T][T][N][T]
7 Tips to Help You Improve Your CIBIL Score2024-05-15 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Factors Determining Your Home Loan Eligibility2024-03-13 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
What Are the Eligibility Criteria for Obtaining a Loan Against Property?2023-03-28 | 4 min

[N][T][T][N][T]
Everything You Must Know About NRI Home Loans2024-02-16 | 3 min

tax Tax
[N][T][T][N][T]
How to Save Tax for Salary Above 30 Lakh?