The deduction of mortgage interest in individual tax means that when personal income tax is levied, the interest generated by mortgage is deducted as a pre-tax deduction, and the deducted income is subject to personal income tax. In other words, when calculating the tax payment, the interest part of the mortgage is deducted from the income first.

Legal objectivity:

Interim Measures for Special Additional Deduction of Personal Income Tax Article 14 If a taxpayer or his spouse uses a personal housing loan from a commercial bank or housing accumulation fund alone or jointly to buy a house for himself or his spouse in China, the interest expenses incurred in the first housing loan shall be deducted according to the standard quota of 1 000 yuan per month in the year when the loan interest actually occurs, and the maximum deduction period shall not exceed 240 months. Taxpayers can only enjoy a first home loan interest deduction. The term "first home loan" as mentioned in these Measures refers to the housing loan that enjoys the interest rate of the first home loan when buying a house.