“If I take tax benefits on Interest payments for my home loan then I will loose HRA (House Rent Allowance) claims”. This is what shared by one of the clients. Then I asked.. “Who Said..??”

This is in fact a confusing situation for most tax payers. Let me tell you, as per the Income Tax Act you can avail tax benefits for HRA, interest on housing loan till you fulfill certain required conditions. House Rent Allowance (HRA) is covered u/s 10(13A) of the Income Tax Act while Interest on borrowed capital for acquisition or construction of house property is covered u/s 24(b) of the Income Tax Act. The deduction for payment of principal component of such home loan is granted under section 80C of Deduction under Chapter VI of the Income Tax Act.

Claim both HRA & Interest on Home Loan

These two components (HRA & Interest on Home loan) are handled in two different income tax sections and has no interlink with each other. One can claim both HRA and interest on home loan irrespective of the place of stay, office until and unless he/she satisfies the necessary conditions to claim such deduction or exemption.

Let us find out some situations where one can claim both HRA exemptions and benefits of interest payment on Home Loans.

Situation 1: You own a House in another city: 

You can very well claim HRA exemption and deduction on interest on home loan if you own a house in city other than your current residing city and presently you are in a rented accommodation. For example, you have purchased a flat in Pune through bank finance and you have been paying regular EMIs, but for employment purpose you are currently sating in Bangalore in a rented apartment. In such case you will be entitled to HRA exemption and tax benefits on both, the principal u/s 80C and interest repaid on the home loan u/s 24b.

It doesn’t matter whether your Pune property is actually rented or left vacant, but yes it should not be an under construction stage else you will not be able to claim deductions for principal repayment and interest payments. Once the construction of the house is completed, you can claim tax benefits on the total interest paid up to the date of completion in five equal installments in five years beginning from the year of completion.

Situation 2: You are staying in a rented house in the same city where you have your own house: 

For example; you have bought a house for which you are repaying principal and interest on the loan taken for it, but now you aren’t residing in it for some genuine reasons like, the house that you have bought is far away from your office, thus you opted to stay in a rented house in the same city, which is nearer to your office. Basis such exceptions you may be permitted to claim HRA and home loan benefits which include both principal and interest repaid on the home loan. But do remember, even if the house owned by you is left vacant you need to pay taxes on the notional rental income under the head of income from house property. It has been noticed, even though tax payer has no trouble in staying in his/her own house or cases like, where tax payer stays in a rented house and keep his/her own house as let-out in the same/not so far locality to avail tax benefits by way of HRA exemption and loan benefits. This will be simply treated as tax evasion. So be careful.

Situation 3: You have a Self-Occupied House Property which is not actually Occupied by you:

Suppose you stay in a rented accommodation in New Delhi for employment purpose and at the same time your family stay in a house property owned by you in Bangalore. You are also repaying loan EMIs for this Bangalore house property. In such case you can claim both HRA and benefits on Home Loans.

Under section 23(2) of Income Tax Act says, Where the property consists of a house or part of a house which;

  1. Is in the occupation of the owner for the purposes of his/her own residence; or
  2. Cannot actually be occupied by the owner by reason of the fact that owing to his/her employment, business or profession carried on at any other place, he/she has to reside at that other place in a building not belonging to him/her,

In such case Annual Value of the self-occupied house property (Bangalore property as per example) will be “NIL”. Standard deduction of 30% will not be allowed here as the annual value itself is nil, however you will be eligible to claim deduction on account of interest repayment on home loan for the self-occupied house property. You can also claim deduction of principal repayments u/s 80C to the max limit of Rs. 1,00,000.

Situation 4: Staying with parents/siblings, also paying rent to them:

If you are staying with your parents or siblings, you can pay them rent to claim House Rent Allowance exemption. This is possible only if the property is registered in the name of your parent/sibling. Only thing what you have to do is to show that you are paying rent to your parents/siblings. Just make sure that your parents or siblings are filing I-T returns.

But if you are paying rent to your spouse and you are getting the receipt for the same, you cannot claim a deduction. The relationship between a husband and wife is not commercial in nature. After all, a husband and wife are supposed to stay together. Hence, payment of rent to a spouse may not be accepted by the income tax authorities.

Also you should keep it in mind, there should be a genuine reason for staying on rent in a close relative’s house else the tax authorities might suspect the transaction to be a tax-evading trick.

How to claim tax benefits on both HRA & Interest on Housing Loan?

377 thoughts on “How to claim tax benefits on both HRA & Interest on Housing Loan?

  • September 27, 2013 at 6:11 PM
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    hi Soubhagya,

    Nice article.

    I have one question .

    In same city, I have my own house rented out. No home loan. and I am staying in rented house.

    I am planning to take improvement loan to reinnovate house. What are the tax benefits i can get ?

    Reply
  • October 7, 2013 at 9:46 AM
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    Dear sir, one more query please, I am claiming HRA as my place of posting is different, my house on which I will be paying interest of Rs 360000/- will be lying vacant. Can I show it on rent and claim rebate on full interest amount of Rs 360000/- instead of cap of 150000/ as it is not self occupied. If that be so then how much will be notional rent? Thanks

    Reply
    • October 7, 2013 at 11:55 AM
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      Hi Amit,

      Yes, you can claim HRA exemption as well as full tax benefit on the home loan (i.e. interest of Rs. 3,60,000). According to Section 23(2) of the Income Tax Act, a property that cannot be occupied because the owner is employed at a distant location does not have to pay tax under Income from house property.

      In such case the house will be treated as ‘deemed to be let out’ and the estimated annual rent (notional rent) will be considered as the taxable value. You can give an approximate rent figure prevailing in the same locality.

      Reply
  • October 20, 2013 at 7:10 AM
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    Hi, I am staying in a flat which is jointly owned by me, my wife and both my wife parents.. Can I show that I m paying rent to my in laws to claim hra benefit. We don’t have a home loan on it.

    Reply
    • October 20, 2013 at 11:51 AM
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      No! Flat is owned by you then how come your in-laws will receive rental income from it. If you are staying with in-laws and you have put the said house for rent then there can be a way. Please note this may be wrong if you do not pay any rent, but wish to claim HRA.

      Reply
  • October 30, 2013 at 1:38 PM
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    If the property is not registered with my parents name, but i am paying rent to my parents and they in turn paying rent to actual owners. Can i claim HRA exemption sir?

    Reply
    • October 30, 2013 at 8:58 PM
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      Hi Sai,

      Yes! you can claim HRA in such scenario, but you need do it through a subletting agreement with your parents. Here your parents should have a valid rent agreement enabling them to sublet/sub-lease the property and the rent received by them should be shown in their IT returns.

      Reply
  • October 31, 2013 at 1:11 AM
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    Hi, I stay at a rented accomodation Hosur (TN) along with my family and working in Bangalore (KA). Ihave bought a house in Bangalore and paying EMI . Planning to go there after 6 months. I am payin Rent in Hosur as well as EMI . Let me know if i can take the dual benefit. If i cannot claim both, let me know the option which would be benefecial

    Reply
    • October 31, 2013 at 8:35 AM
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      Hi Thrilok,

      If your Bangalore house property is not under construction phase (doesn’t matter whether you have let it out or is vacant) then you can very well claim both HRA as well as interest payment on the borrowed capital. But make sure the rental income (or notional rent if vacant) from the said property should be declared as Income from House Property and tax should be paid on such income. No deduction of principal repayment will be allowed here.

      Reply
  • November 8, 2013 at 11:47 PM
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    Hi Soubhagya, Thanks for sharing this information. I have a query on Situation 2: You are staying in a rented house in the same city where you have your own house:
    As per you, I can claim both HRA and loan int/principal benefits if i am not residing in my house for some genuine reasons – what could be other reasons apart from home being far from office and also how far is far as per income tax guidelines ? Thanks.

    Reply
    • November 9, 2013 at 6:25 PM
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      Hi Steeve,

      There could be n number of possible genuine reasons, difficult to list them out here 🙂

      Reply
      • November 12, 2013 at 1:08 PM
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        Hi, Thank you for your reply.
        In one other posts it is mentioned that if one is not occupying the property for any reason other than business/profession/employment, the int. benefit is not available however one can claim HRA. Is it true? How can I get the actual I.T act section (24) that deals with this in case i want to read it myself.

        Reply
        • November 12, 2013 at 1:12 PM
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          Hi Steeve,

          Let me know what is the exact scenario. Then I will be able to give my view.

          Reply
          • November 29, 2013 at 12:33 AM
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            HI

            In reference to above scenario, I need suggestion om my case, I currently own a house in Delhi which is jointly owned by me and mother, but due to some family dispute I am not staying in same house but in another house in same locality which is owned by my Mother. I am currently paying rent to my mother for which she is showing in her tax return, Pls suggest can I claim HRA

          • November 29, 2013 at 1:02 AM
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            Hi Amit,

            Yes! you can very well claim HRA benefits since you are paying rent to your mother. And the best part is she is filing her tax returns for these incomes.

  • November 12, 2013 at 2:19 PM
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    Hello,

    Nice Article

    I have below situation, kindly provide your input.

    My husband and me own a property (A) where we reside as of now. I am a co-owner of the property (A). We do not have any loan on this property (A) now. I have another property (B) in the same city which is on loan and owned by me only but loan taken on my husbands name. The same property (B) is being outlet and income comes on my name.

    1. How can my husband claim interest under section (24) for second property (B)?
    2. Can he claim HRA also?
    3. How to treat the income from house property?
    [property (B) is on my name only and loan taken on my husband’s name]
    4. How can my husband get the benefit of different sections 10(13A) , 24, 80C. I don’t need the tax benefit for section 24 and 80 C.

    Regards,
    Pinky Patel

    Reply
    • November 12, 2013 at 3:01 PM
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      Hi Pinky,

      Please find the answers in sequence to your queries;

      1. If your husband wants to claim deductions u/s 24b then income in the form of rent has to be considered as his income fully.
      2. I don’t think he will be able to claim HRA, because both of you are currently staying in a self occupied house property and the same is owned jointly.
      3. If you have no income (or lower taxable income) then you can treat such rental income as your income, but you can not take deduction of section 24b because it’s being paid by your husband.
      4. This doesn’t have a short answer. This may need a proper tax planning first to get maximum benefits from all the stated sections within the purview of IT Law. You may contact us for our Fee-Only services.

      Reply
  • November 23, 2013 at 10:52 PM
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    I am married and recently I changed job I stay alone in Hyderabad and my family stay in my native place Delhi so could I show rent receipt on my name from my native place Delhi

    Reply
    • November 24, 2013 at 9:14 AM
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      Hi Ravi,

      You need to show rent receipt for the house in Hyderabad to claim HRA. In case for some periods you were employed in Delhi during this financial year, then for those periods you can show rental receipts.

      Reply
      • November 27, 2013 at 10:39 PM
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        Actually I had changed my job in September due to some reason I could not bring up my family in Hyderabad like daughter school session is going on. I am paying three time more rent in Delhi than Hyderabad that’s why I want to show the rent receipt from Delhi.

        Reply
        • November 28, 2013 at 12:10 AM
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          Hi Ravi,

          I can understand the pain, but you will have to bear this for sometime till your family is completely moved to Hyderabaad.

          Reply
          • November 28, 2013 at 6:59 PM
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            Thanks a lot for this info

          • November 28, 2013 at 7:59 PM
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            You are most welcome Ravi!

  • November 26, 2013 at 9:47 PM
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    I have my own home in Pune and my parent stay in chennai (rented). The rent for the Chennai is paid by me to the landlord.
    In this case, can I claim HRA for the Chennai home and Home loan exemption for the Pune Self occupied home?

    Reply
    • November 27, 2013 at 12:29 AM
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      Hi Vivek,

      I guess, you are currently employed in Pune! In such case, I don’t think you can claim HRA for the rent paid on behalf of your parents who stay in Chennai. But you can still be able to claim deduction of interest amount to the extent of Rs. 1.50Lacs towards self occupied house property.

      Reply
      • November 27, 2013 at 2:31 PM
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        Yeah you are right, I am employed in Pune. Thanks for the clarification anyways, really useful.

        Reply
        • November 27, 2013 at 4:09 PM
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          You are most welcome Vivek!

          Reply
  • November 28, 2013 at 5:51 PM
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    Hi Patra Ji,
    Good Evening !
    I am living in gurgaon on rented basis with my family and I had taken the house loan in delhi dated 07th May 2011 my question is that can i get the benefit u/s 24 (B) for interest on housing loan , u/s 80C for repayment on housing loan ? if possible then what is the process ?

    Reply
    • November 28, 2013 at 6:08 PM
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      Hi Saurabh,

      It’s very simple, if you are employed then just submit Loan Provisional Statement to your employer (this will help you to claim 80C for principal repayment & 24b for interest paid on the borrowed capital), also submit rent paid (by you) receipt (for Gurgaon house) to claim HRA. Hope I answered to your query.

      Reply
      • November 29, 2013 at 12:15 PM
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        Good Morning Patra ji ,
        Thanks for your answer …. i have planned to purchase new house in this financial year in delhi worth Rs. 38 lac by housing loan… can i take all tax benefit, i.e interest benefit u/s 80EE for this new house , tax benefit for housing loan dated 07th May 2011 and HRA Exemption in current financial year ? . M confused as my employer does not clear my doubt.

        Reply
        • December 2, 2013 at 11:06 PM
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          Hi Saurabh,

          I don’t think you can claim deductions u/s80EE here. On of the conditions of this section says “The assessee does not own any other residential house property on the date of sanction of the loan.”

          Reply
  • December 3, 2013 at 4:00 PM
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    my salary bifurcation is Basic + HRA.. If i bought my own house then I will not be applicable for HRA?

    Reply
    • December 4, 2013 at 4:15 PM
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      Hi Siddh,

      You will still get HRA.

      Fyi, if you are staying in a rented accommodation then a portion or full HRA benefits are non-taxable, but once you have your own house in that case the complete HRA will be taxable.

      Reply
      • December 7, 2013 at 2:28 PM
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        Hi soubhagya,
        I am living in mumbai and paying rent here in mumbai but due to some reasons i am not able to take PAN number of landlord.
        Moreover i have a home in kolkata where my parents stays and it is a rented accomodation. The house is in the name of my mother can i go for sublet arrangement with my mother??.
        I do stay in kolkata some times but primarily in mumbai.
        Please advice.

        Reply
        • December 10, 2013 at 1:16 PM
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          Hi Vivek,

          You can claim HRA exemption for the rent paid in the city you are employed. I guess you are employed in Mumbai, not in Kolkata.

          Reply
          • December 12, 2013 at 8:07 PM
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            thanks for reply..can you tell me when is the new provision of LTA expemtion is applicable from? i.e. above 1 lakh PAN no is to be provided. Is it applicable from next year or current year..please mention the date..

          • December 12, 2013 at 8:30 PM
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            Hi Vivek,

            It’s about HRA and the same is expected to be effective from current financial year.

  • December 8, 2013 at 6:44 PM
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    I have a own house at 7th floor and unable to occupy it because the builder has not yet made the lift operational. In the same premises currently am staying in for rent in ground floor. Conidering this to be genuine a reason, i understand that i’m eligible for both HRA and Interest exemption. Since my own house is lying vacant, can i declare a “zero” notional rent?

    Reply
    • December 10, 2013 at 1:06 PM
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      Hi Arun,

      If the said house is the only one house property, then in that case you can show the annual value as NIL. But it depends on the assessing officer whether he/she accept this.

      Reply
  • December 12, 2013 at 7:53 PM
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    I stay in Ghaziabad (Uttar Pradesh) on rent, but my flat (on which I want to claim home loan benefits) is in NOIDA (Uttar Pradesh), but I work in Gurgaon (Haryana). Will I be eligible for claiming both HRA and home loan benefits ?

    Reply
    • December 12, 2013 at 8:05 PM
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      Yes! of course.

      Reply
  • December 15, 2013 at 12:37 PM
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    Hi Soubhagya,

    I have a query. I live in Delhi with my grandmother and pay rent to her. My parents also lives in the same city in a home owned by me. My office is in Gurgaon. Now considering the reason that it’s easy for me to commute to my office from my Grandma’s house (though it’s distance from my office is only slightly less as compared to distance from my own house), is it possible for me to claim both the interest exemption and the HRA?
    Also, do I have to pay tax on notional rent as my own property is not self-occupied?

    Reply
    • December 15, 2013 at 7:47 PM
      Permalink

      Hi Harsh,

      Yes! It may be possible. you can refer to situation 3 of this post. Also you do not need to so any notional rent if the said house property (owned by you) is shown as self-occupied.

      Reply
        • December 16, 2013 at 6:48 PM
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          Hi,

          As per your reply to Harsh, you’re saying that Self occupied own property (parents occupied) for which we are repaying loan & rented property can be in the same city and we can claim both interest exemption & HRA. Correct? Situation 3 is about different cities. But IT system in my company doesn’t allow both to be claimed from same city. If both have to be claimed then they are saying notional rent is mandatory (for parents occupied property). Is this wrong then?

          Reply
          • December 16, 2013 at 7:22 PM
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            Hi Arun,

            What I answered to Harsh is “Yes! It may be possible”, but did not say “Yes! It is possible”.

            What your company has made in the system is completely right. But some time depending upon case to case (how genuine the situation is) the assessing officer may or may not allow such claims.

            There are many cases where assessee has occupied a rented accommodation near to his office and he/she also owns a house in the same city which is too far (very difficult to travel daily), thus he cannot stay in that house. I am not saying all the assessee should extract a point (in their favour) rather realise, it all depends on the assessing officer whether he/she approves such claims after evaluating the reason.

  • December 17, 2013 at 11:02 AM
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    Dear Sir,

    I am staying in a rented house also constructing my own house from last year. My last year intrest on home loan is Rs. 36769 (2012-13) and this year it is Rs. 109001 (2013-14). I did not take interest exemption last year.

    As I would be occupying my house in February 2013 can I claim total interest claim of Rs. 145770 including last year? I can still claim HRA exemption (Rs.53000)?

    My full EMI is started a months ago i.e. November 2013 (there will be 5 instalments in 2013-14).

    Please reply.

    Thanks and regards

    Purushotham

    Reply
  • December 17, 2013 at 11:04 AM
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    Dear Sir,

    I am staying in a rented house also constructing my own house from last year. My last year intrest on home loan is Rs. 36769 (2012-13) and this year it is Rs. 109001 (2013-14). I did not take interest exemption last year.

    As I would be occupying my house in February 2014 can I claim total interest claim of Rs. 145770 including last year? I can still claim HRA exemption (Rs.53000)?

    My full EMI is started a months ago i.e. November 2013 (there will be 5 instalments in 2013-14).

    Please reply.

    Thanks and regards

    Purushotham

    Reply
    • December 17, 2013 at 11:59 AM
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      Hi Purushotam,

      Once the house is occupied post construction, all the previous year(s) interest will be allowed only to the extend of 1/5th (this will continue for 5 years) plus current year interest subject to max limit of Rs. 1,50,000. Since you have been staying in a rented house till you get into your own house, you are very well eligible to get deductions on HRA benefits.

      Reply
  • December 19, 2013 at 6:37 PM
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    Hi,

    we have purchased a property in vizag in the current year. It is completed and registered. However, occupancy certificate could not be taken till now. No municipal taxes have been paid . The house is not let out till now an d is lying vacant. Can I claim housing loan exemption in such case? Please let me know if municipal taxes receipt is compulsory to claim exemption.

    Reply
    • December 19, 2013 at 7:18 PM
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      Hi Sunil,

      If construction is completed you can very well claim home loan principal & interest benefits for taxation purpose. Also Municipal Tax paid receipt is not mandatory to take these claims/deductions. Cheers!

      Reply
  • December 23, 2013 at 3:03 PM
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    Dear Sir,

    I have a loan on my home and paying EMI of 8.4 lakhs / year ( ~6 lakh of interest )… While i am stayin in this home, i have also let out a room for a student for a nominal rent of 96,000 / year ….
    In my case i won’t be claiming HRA, but will i be able to claim exemption on total interest paid – rental received ( around 5 Llakh )?

    Thanks!

    Reply
    • December 23, 2013 at 3:25 PM
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      Hi Murli,

      In your case the calculation for income from house property will be based on area wise division where self-occupied and let-out portion will be treated as two separate units. Thus any municipal taxes, rent, interest etc paid will be proportionately divided and income of both the units will be computed separately.

      Reply
  • December 23, 2013 at 6:59 PM
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    Hi

    What are the documents required to show that my house has completed construction. My housing loan certificate says purpose of loan “plot purchase and construction”. Is this sufficient or do I need any other document to show that construction is complete

    Thanks
    Sunil

    Reply
    • December 23, 2013 at 8:10 PM
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      Hi Sunil,

      You need to obtain Completion Certificate or Occupancy Certificate.

      Reply
  • December 24, 2013 at 8:44 AM
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    Hi,
    I co-own a house property along with my mother (ownership share not defined). I was made co-owner only for the purpose of getting a housing loan (based on my salary). Can I pay rent to my mother for letting me use her portion of the house and claim HRA while also claiming Housing Loan Interest (1.5L) and Principal Repayment (1L) for my portion of ownership in the self occupied house?
    Thanks

    Reply
    • December 24, 2013 at 9:15 AM
      Permalink

      Hi Peter,

      Since there is no clear definition of area wise ownership, I think it will not be so easy to convince AO with regards to claiming HRA with the proposition you are looking at.

      Reply
  • December 31, 2013 at 2:42 PM
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    Hi,
    I own a house in Bangalore, But I stay in a rented house as my own house is quite far from my Office.
    My own house is still vacant from past 1 year, some how i could not rent ot out for others (Planning to shift in next year)

    So can I claim both House Loan benefits and HRA benefits?

    Reply
    • December 31, 2013 at 4:55 PM
      Permalink

      Hi Ranjit,

      May be possible. Look at situation 3 in this article. In this way without even staying in the said house property you may claim it as self-occupied and claim HRA.

      Reply
  • January 1, 2014 at 7:01 PM
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    Hi Patra,
    I have completed own house construction by june and occupied house by August time . In my case, who will be giving occupancy cetrificate in order to claim HRA from March-August and housing interest under IT. I went with Composite housing loan.
    Thanks in Advance.

    Reply
    • January 1, 2014 at 7:18 PM
      Permalink

      Hi Pradeep,

      I think you can get it from the builder or you need to approach the Municipal Corporation.

      Reply
  • January 2, 2014 at 11:13 AM
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    HI,

    I own a house in Vizag where my parents live and I am availing Home Loan Benefits for the same.

    I am living in Hyderabad and now I am planning to buy a house in Hyderabad. So Is there a possible way to avail HRA Benefits for this new house. Please suggest.

    Thanks,
    Manoj

    Reply
    • January 2, 2014 at 4:50 PM
      Permalink

      Hi Manoj,

      As per current scenario I believe you are availing HRA benefits for taxation purpose, right? But once you have you own house in the same city you are working and you do not have any valid/strong reason of not staying in that house, then I don’t think you can claim such HRA benefits. But yes, until the construction completed (in case) you can continue to get these benefits.

      Reply
  • January 2, 2014 at 3:35 PM
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    Hi,
    I have 2 property in same city on my name both are let out. Me and my wife lives in house owned by my wife with name on property docs as name before marriage. One of the property that I own does not have loan any more and second one has the loan. Can I show the one with loan as self occupied and avoid showing that rent as income? If not how can i get the tax benifit of home loan and avoid incometax as much as possible.

    Thanks in advance for the reply.
    santosh.

    Reply
    • January 2, 2014 at 4:23 PM
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      Hi Santosh,

      If there is any income coming from any source is not advisable to hide. Since both the houses are let-out, you need to show the rental income from these houses while filing returns under the head of “Income from House Properties”. Anyways you will get entire interest on the borrowed capital as deduction from the taxable income. There may be a chance if your spouse doesn’t have any taxable income (or lower tax bracket) then adding her as a co-owner for these properties and then later rental income can be divided among to reduce some tax liabilities.

      Reply
      • January 2, 2014 at 5:15 PM
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        Hi,

        Can you explain this from your reply, “Anyways you will get entire interest on the borrowed capital as deduction from the taxable income.”

        Also if I show both the hosues as rental how can I get the exemption on the home loan currently being paid for one of these?

        Thanks.

        Reply
        • January 2, 2014 at 8:57 PM
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          Hi Santosh,

          Clarification to my earlier reply is, “in case of house property which is let-out out gives you the opportunity to claim entire interest paid towards repayment of outstanding loan which is instead Rs. 1,50,000 only in case of house is being self-occupied”.

          Income (by way of rent) from both the houses will be calculated separately and you need to deduct loan interest paid during the financial year from the rental value post standard deduction and municipal taxes paid (if any) from one of the houses where loan exists.

          Reply
  • January 2, 2014 at 4:16 PM
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    I am currently staying with my parents in Mumbai (Mulund) and have purchased a flat in Badlapur on May 2013 which is still under construction.
    1) Can i claim HRA tax benefit?
    2) Can i claim housing loan benefit? (Could you please be more in detail as I don’t understand the terms)
    3) Can i claim stamp duty and registration done somewhere in July 2013
    4) Is there anything which i have missed?

    Reply
    • January 2, 2014 at 4:35 PM
      Permalink

      Hi Reshma,

      Please find the answer in sequence to your queries.
      1. If you are paying any rent to your parents then “Yes” you can claim HRA benefits by showing the rent payments. Also note, you need to ensure such incomes are being considered by your parents while they file their IT returns.
      2. You can claim interest deduction only after construction is completed. Once construction is completed it’s upto you whether you put it for let -out of self occupied. Till construction completed whatever interest have been paid will be divided by 5 plus complete interest for the financial year when you let-out or self occupied will be taken as deduction. For self occupied you can take benefits upto Rs. 1.5Lacs and in case of let-out there is no such max limit.
      3. No
      4. Additionally, the decision is on you whether you go for self occupied or let-out. If pre-construction interest paid is high then I suggest putting it for rent. Anyways this needs little more calculation and analysis of personal finance.

      Reply
      • January 6, 2014 at 11:21 AM
        Permalink

        To be honest, the possession was suppose to be on Dec.’13, but this si now pushed to March mid. Can i claim the interest and principal, And if i can, are you aware what documents do I need to submit.

        What if i take the benefits now and later they push it more further? Just our of curiosity..hope this does not happen.

        Reply
        • January 6, 2014 at 11:28 AM
          Permalink

          Hi Reshma,

          It seems difficult, since the construction is not yet completed.

          If you take any benefits now, later such tax benefits will be withdrawn along with you might need to pay some interest or penalty based on the AO, how he/she treats it.

          Reply
          • January 6, 2014 at 12:25 PM
            Permalink

            And what bout stamp dutya nd registration which i did in the month of July-2013. where can i claim this?

            Thansk so much for clearing all my important doubts

          • January 6, 2014 at 12:37 PM
            Permalink

            Hi Reshma,

            You may claim these u/s 80C.

  • January 3, 2014 at 4:55 PM
    Permalink

    Hi,

    we are constructing a house which we are planning to occupy by this Feb. I have taken a loan starting this January 2013.
    my questions are,
    a. can I claim HRA till January?
    b. Can I claim the interest on housing loan that I have paid till now fully in this financial year?
    c. Can principle amount repaid till date be claimed in this financial year?
    d. Is 1,00,000/- principal loan repayment under section 80c considered if my pf+insurance are already covering the 1,00,000/- limit?

    Reply
    • January 3, 2014 at 5:29 PM
      Permalink

      Hi Santosh,

      Find the answers in sequence to your queries;

      1. Yes! Why not!
      2. Yes, but ensure you occupy or let it out before end of the FY 2013-14.
      3. Yes i.e. for FY 2013-14., but subject to you occupy before the end of the FY 2013-14.
      4. Overall limit for 80C is Rs. 1,00,000. If existing sources (PF plus Insurance) are already fulfill this; there is no further benefits you will get by claiming principal re-payment towards borrowed capital for housing loan.

      Reply
  • January 4, 2014 at 12:16 PM
    Permalink

    Hi

    I have a query regarding HRA and home loan. I was living in rented house from April 2013 to November 2013 (for this period I have paid home rent). I booked a flat in 2012 and got the possession on 1st of December 2013. Now I would like to know if I can claim HRA for the 8 months (April to November 2013) and Home Loan Benefit for 4 months (December 2013 to March 2014). If yes kindly let me know what documents should I produce for home loan benefit.

    I started paying full EMI towards my loan from September 2012 till date.

    Regards

    Reply
    • January 4, 2014 at 2:22 PM
      Permalink

      Hi Santosh,

      Yes! You can claim HRA for those 8 months along with Home Loan interest benefits for the full year plus 1/5th of total interest paid till March 2013 (subject to max cap as per self-occupied property i.e. Rs. 1,50,000). To get Home Loan benefits you need to submit possession certificate to employer. Even if it doesn’t work, you can claim tax refunds if deducted higher by filing IT returns before the due date for the AY 2014-15. Cheers!

      Reply
      • January 5, 2014 at 5:44 PM
        Permalink

        Thank you very much for the reply. It is helping me a lot.

        Reply
        • January 5, 2014 at 7:40 PM
          Permalink

          You are most welcome!

          Reply
          • December 26, 2014 at 9:33 PM
            Permalink

            Hi Yogesh,

            You can claim HRA exemption benefits for the period upto your stay in the rented accommodation. Don’t worry!

  • January 6, 2014 at 11:47 AM
    Permalink

    Can you please help me to know, how can i claim tax benifit ? I am working in mumbai and currently staying in rented apartment but i have property in pune which is rented out and i am paying home Loan EMI for that flat ?

    Reply
    • January 6, 2014 at 11:57 AM
      Permalink

      Hi Sgaikwad,

      There won’t be any issue it seems. You just have to show proof of rent payments along with rental agreement and PAN of landlord to claim HRA. For let-out property you can declare all rental income along with interest paid provisional certificate from bank. You employer can calculate income from house property and adjust TDS else you can submit Income from house property certificate from a chartered account and submit the same to your employer.

      You may write to us at info@succinctfintech.com in case you need any assistance on Income from House Property Certificate.

      Reply
  • January 6, 2014 at 6:54 PM
    Permalink

    Hi Soubhagya,

    I have a query on tax computation.
    I am working in Bangalore and owing a property (flat) within 2kms radius from my office taking house loan. I have given the property as rent, but staying in another rented house due to more spacious and better facilities.
    In this scenario, can I get tax benefit on HRA and also house loan; as the property is let out?
    If YES, is the benefit on house loan is limited to 1.5 lks OR total interest amount minus 70% of income from house minus if any tax paid?

    Thx in advance.

    Reply
    • January 6, 2014 at 7:00 PM
      Permalink

      Hi Shantanu,

      Unless you have some genuine reason as why you can’t stay in your own house, I don’t think AO will accept the reason that the said house property is smaller and so only you are staying in rented accommodation.

      With regards to let-out property, the income will be calculated after 30% standard deduction and entire interest paid on borrowed capital will get adjusted.

      Reply
  • January 6, 2014 at 7:48 PM
    Permalink

    Hi,

    I am currently paying a home loan and staying in my flat. However I am paying for the rent of a flat that my parents are staying in. Both the flats are in the same city. My father does not claim HRA.

    Can I claim HRA and interest on housing loan?

    Reply
    • January 6, 2014 at 8:10 PM
      Permalink

      Hi Ben,

      If you are paying rent then yes you may, but it depends whether there is any genuine reason prevails as why you are staying in a rented accommodation. There may be a chance your employer might accept it and let you claim HRA, but later if any requirement arise from AO, you need to justify the same.

      Reply
      • January 7, 2014 at 1:46 PM
        Permalink

        Hi,

        Mine is also a similar query. Myself and my parents are staying in the same Apartment but in different flats as nuclear family. I’m staying in rented accomodation. My parents are staying in my flat for which am repaying loan. Can i declare notional rent (i’m not getting any rent from my parents) and claim both HRA and interest exemption?

        Reply
        • January 7, 2014 at 2:10 PM
          Permalink

          Hi Kavin,

          Since you stay in a rented accommodation in the same building where you own a house property, so I don’t think you will be able to get HRA benefits. Even if so, later you have to justify the same to the AO.

          Reply
  • January 8, 2014 at 3:41 PM
    Permalink

    I got the possession of my property on 25/03/13 in Noida(which is jointly owned by me and my mother,whose loan i am paying), i am still not residing in the same because of some genuine reason, i am staying at my Parents house in Delhi for which i am paying rent to my mother.

    I have a Query as i am paying the rent, so am i entitled to claim both HRA and Interest on Home Loan.
    also if yes am i suppose to show rent as income from other source from my property ,which is still vacant.

    Work Location: Noida
    Rented Location: Delhi
    Property Location: Noida

    Regards
    Paras Kaushik

    Reply
    • January 8, 2014 at 6:35 PM
      Permalink

      Hi Paras,

      Yes! You can claim both HRA as well as Interest paid on borrowed capital as deduction from your taxable income. Rent will be shown under the head of Income from House Property where you can adjust municipal taxes paid (if any), 30% standard deductions u/s 24a, and interest payment amount u/s 24b.

      Reply
      • January 9, 2014 at 10:37 AM
        Permalink

        Hi Patra,

        Thanks for your response, i have another query, I want to claim pre-Emi interest (1/5th), can i claim the Home loan interest beyond Rs.1,50,000 limit if we want to add up the pre emi interest as well.

        Regards
        Paras

        Reply
        • January 9, 2014 at 11:12 AM
          Permalink

          Hi Paras,

          If you show the house property as let out then there is no upper limit to claim interest as deduction. Rs. 1,50,000 cap is given for house property which is self-occupied during the FY. If you add up 1/5th of pre-construction interest and it crosses Rs. 1,50,000 then only Rs. 1,50,000 will be allowed as deduction in self-occupied house property.

          Reply
  • January 8, 2014 at 4:43 PM
    Permalink

    Hi,

    I am staying in a rented house in Bangalore and i have booked a flat in April 2013. I am paying the EMI from June for the home loan and also paying the rent for the rented house. The possession of the flat will be sometime in June 2014. I would like to know whether i can claim HRA and Principal repayment benefit (80C) for this financial year

    Karthik

    Reply
    • January 8, 2014 at 6:43 PM
      Permalink

      Hi Karthikeyan,

      You can very well claim HRA for the FY 2013-14, but for the purpose of claiming Principal repayments u/s 80C it requires that the property construction is completed before the end of FY 2013-14.

      Reply
  • January 9, 2014 at 11:59 AM
    Permalink

    I stay in a rented house and pay rent. I also own another house in same vicinity on which i pay interest on loan and this house is let out on rent. can i claim HRA on rent paid and claim loss from house property for the other house (interest outflow less rental income). Will the situation differ if I take another (3rd) house in the near by area and where my parents will reside (without paying rent to me) in that 3rd house.

    Reply
    • January 9, 2014 at 12:07 PM
      Permalink

      Hi Ojha,

      It may be difficult to justify the reasons for having your own house, but you are staying in rented accommodation in the same easy accessible locality. But if you own two houses in the same locality, you can show one as let-out and other as self occupied, but you will miss to claim HRA.

      Reply
      • January 9, 2014 at 12:48 PM
        Permalink

        Thanks for your repsonse. The only reason i live in rented house is because its bigger (3bhk) than my owned house (2bhk) which i have let out on rent. Dont know whether this will be a justfied reason for cliaming HRA and loss from HP together.

        Reply
  • January 9, 2014 at 1:10 PM
    Permalink

    Can we claim HRA and interest for two home loans, if yes , what is the limit.

    Reply
    • January 9, 2014 at 2:51 PM
      Permalink

      Hi Kumar,

      Yes, but it depends on a logical scenario. If you are claiming one of the houses as Self-Occupied then Rs. 1,50,000 where other one will have no max limit. In case all the houses are treated as let-out, even in that case no max limit will be levied.

      Reply
  • January 9, 2014 at 2:11 PM
    Permalink

    Hi,

    I have a housing loan and I am claiming the tax benefit for that. I am staying with my parents and wife. I will probably will move to rented accommodation near by my office with my wife and my parents will stay in my old house. The distance between my office and my own house is around 20 km. The distance between my office and my rented house is 5 km. The distance between my own and rented house is 25 km approximately.
    Am I allowed to claim tax benefits for both HRA and HL?

    Reply
    • January 9, 2014 at 2:45 PM
      Permalink

      Hi Sri,

      Basis these distances I can’t say whether you will get both the benefits or not. You may apply for the same, but eventually the AO has to approve this claim.

      But technically this looks in favour 🙂

      Reply
  • January 9, 2014 at 3:14 PM
    Permalink

    Hi,
    I ve been gifted a residential property by my mom on which i had taken home loan to construct additional floor.The property is still registered in the name of my mom which shall be passed on to me after her.
    Now that I stay on the additional floor with my parents & let out the other floor,the rent of which is collected by my parents.
    Can i claim HRA on the part of the property where i stay along with my parents & also the tax benefit on the EMI repaying?

    Reply
  • January 9, 2014 at 4:53 PM
    Permalink

    Hi,
    I ve been gifted a residential property by my mom on which i have taken home loan to construct additional floor.The property is still registered in the name of my mom which shall be passed on to me after her. Now that I stay on the additional floor with my parents & let out the other floor,the rent of which is collected by my parents. Can i claim HRA on the part of the property where i stay along with my parents & also the tax benefit on the EMI repaying?

    Reply
    • January 9, 2014 at 5:32 PM
      Permalink

      Hi Aby,

      You need to get into a rental agreement with your mother where certain amount of rent will be decided, the same amount you can pay and show to your employer to claim HRA benefits, but make sure your mother files her IT returns without fail by showing all these rental income amount (including rental income from other floors) as income from house property.

      Fyi, I don’t think there is any benefits available for loan taken for repair and renovation.

      Reply
  • January 9, 2014 at 10:35 PM
    Permalink

    Hi Soubhagya,

    “Notional rent is nothing but an expected rent for the property (or similar property). May be one month’s notional rent income can be shown, but 12 months lettable value will be taken for calculation purpose. With this you can claim entire interest plus 1/5th of pre-construction interest paid before 31st March 2013 for next 5 years.”

    You had mentioned this to me over my email. Sorry i could not find the related post and hence am posting it here. Please help.

    Suppose if I show the one month’s notional rent as 10,000/-, what will be the lettable value considered ? Please help me with the calculation. Thanks

    regards,
    Arvind

    Reply
    • January 10, 2014 at 8:46 AM
      Permalink

      Hi Arvind,

      In short, on Rs. 10,000 you can deduct any municipal tax paid, then 30% standard deduction can be deducted from the rent income net off municipal tax (if any) then you can subtract entire interest paid for the year 2013-14. You can also deduct 1/5th of interest paid before March’2013 for the next 5 years. For eg.

      A. Gross Annual Value = Rs. 10,000
      B. Less Municipal Tax = Rs. 2,000
      C. Net Annual Value (A-B) = Rs. 8,000
      D. Less Standard deduction 30% of Rs. 8,000 = Rs. 2,400
      E. Less Interest paid for FY 2013-14 = Rs. 2,20,000
      F. Less 1/5th pre-construction interest = Rs. 1,00,000
      G. Total Loss from house property [C – (D+E+F)] = (Rs. 3,14,400)

      P.S. These are just assumptions

      Reply
  • January 10, 2014 at 5:20 PM
    Permalink

    Hi,
    I am working into noida(U.P) and booked home in Greater Noida which is near to hand over, My wife is staying with my parent into my home town Gwalior(M.P) . can i take tax benifit of home loan for Greater Noida house and HRA benifit of Gwalior House both

    thanks
    Praveen

    Reply
    • January 10, 2014 at 6:05 PM
      Permalink

      Hi Praveen,

      Since your working location is Noida, I don’t think you can get HRA benefits for Gwalior house, but yes you can take the benefits for interest paid on borrowed capital for Greater Noida house property.

      Reply
  • January 11, 2014 at 9:18 AM
    Permalink

    Due to my daughter’s school nearby, I intend to be put up in the rental accommodation upto the academic year. My parents along with my son have shifted to my new flat in an other locality last august. Can i claim for deduction of both housing loan and rebate on HRA. Plse reply to my email at an early date, thank you.

    Reply
    • January 11, 2014 at 4:51 PM
      Permalink

      Hi Chandran,

      You may, but it depends on the approval of AO because both the houses, rented and your own are located nearby areas.

      Reply
  • January 13, 2014 at 4:28 PM
    Permalink

    Hi,

    I am expecting flat A’s possession in March 2014, I am also having a housing loan for this flat. Sole owner of house is me. For the full financial year 2013-14, we are staying on rent. My wife bought a flat B in Jun 2013, of which owners are my wife and my mother in law.

    Getting the full interest exemption on loan for flat A is the best case for me as that amount is high.

    Now in this situation I have two questions –
    1. Can I get HRA exemption for the rent I am paying along with the full interest?
    2. Or I will not get HRA and I will have to show to be staying at a flat owned by my wife to get the full interest exemption on A.
    3. Or should I show Rs. 150000 interest deduction on flat A and HRA for the current rent.

    Thanks and Regards,
    Vinit

    Reply
    • January 13, 2014 at 10:43 PM
      Permalink

      Hi Vinit,

      1. If construction is completed before end of Fy 2013-14 and the same is let out then; Yes you can.
      2. Answer 1 has clarified this I hope
      3. In other case this can be done if you occupy the house property post the construction, but before March 2014. You can claim HRA for those months you stayed in a rented accommodation.

      Reply
  • January 14, 2014 at 12:12 PM
    Permalink

    Hey Soubhagya
    Nice article and I also read the various queries raise and answers to those, however I have my own set of queries and would appreciate if you could help. Here is the case:
    I am currently residing in Pune in a rented apartment. I have a bought a flat in same city that was under construction until Nov 2013. It was offered to me for moving into it in end Nov 2013, however I chose not to move, since it’s very far from my office and inconvenient to travel so much. My present rented apartment is close to my office and it’s more convenient for me and my family. So my queries are as below:
    1. In the above scenarios I trust I can claim exemption on HRA as well as deduction from housing loan (interest) under section 24. Please confirm. Also, what proof do I need to show to my employer for this? Any letter from a CA as was informed to me by our payroll third party company which states that since my owned house is far off, I can claim deduction under section 24 as well.
    2. Construction of my house was completed in end Oct 2013. So can I avail 100 % exemption under section 24? Is there a requirement that house should have been completed at start of FY ( i.e 01st April 2013? ) for me to claim deduction under section 24 in this FY.
    3. Do I need to show any notional rent also? The house has not been let out. So going calculation that you have illustrated in response to an earlier query:
    a. Gross Annual value: Rs 120,000
    b. Less Municipal Tax = Rs. 2,000
    c. Net Annual Value (A-B) = Rs. 118,000
    d. Less Standard deduction 30% of Rs. 118,000 = Rs. 35,400
    e. Less Interest paid for FY 2013-14 = Rs. 2,83,500
    f. Less 1/5th pre-construction interest = Rs. 2,00,000
    g. Total Loss from house property [C – (D+E+F)] = (Rs. 4,00,900)
    Thus, since the above is negative do I not need to show any notional rent? So, nothing to be declared as income from house?
    Eagerly awaiting your response
    Warm regards

    Viveik

    Reply
    • January 14, 2014 at 2:41 PM
      Permalink

      Hi Vivek,

      Find the answers in sequence to your queries;

      1. Yes you are right. For this you need to show completion certificate and loan provisional certificate to claim interest deductions u/s 24 along with expected or actual rent amount till end of FY 2013-14. To claim HRA you need to submit rent receipts and PAN of land load.

      And yes, CA certificate is required (many employer ask for) if you show the house property as let out. You may write to us about any such requirement.
      2. Don’t worry you can claim 100% of interest paid towards borrowed capital. Even you can claim 1/5th of total interest paid before 31st March 2013 for the next 5 assessment years.
      3. If the said property is not actually let-out then annual value will be calculated basis Notional Rent. And yes you need to show such notional rent even if your calculation comes -ve because you are going to declare loss from house property for the financial year.

      Hope I clarified your queries!

      Reply
      • January 15, 2014 at 11:11 AM
        Permalink

        Hmm, yeah

        Thanks. Can i show the loss from house property in the income from other sources and take its benefit. Additionally can i also take exemption under section 24?

        Also, is completion certification enough or possesion letter required for claiming exemption under section 24.
        Finally, pleasse mail ur tele no. on my email id

        Reply
        • January 15, 2014 at 1:15 PM
          Permalink

          Hi Viveik,

          Losses from house property should only be shown under the head of “Income from House Property” while declaring to your employer as well as the same should be followed while filing IT returns.

          Completion certificate would be enough to claim deduction u/s 24b.

          You may visit here to know more about our Fee-Only services http://www.succinctfp.com/index.php/fee-only-services/

          Reply
  • January 14, 2014 at 1:06 PM
    Permalink

    Hi,

    Thanks a lot. I would like to avail avail your services if you are based out of Pune. Can you please reply on my email id with your phone no/contact details.

    Thanks,
    Vinit

    Reply
    • January 14, 2014 at 1:25 PM
      Permalink

      Hi Vinit,

      Mail sent.

      Reply
  • January 14, 2014 at 1:55 PM
    Permalink

    Hi sir,

    I have one confusion now I am leaving on rent @ seawood (Navi Mumbai) & I took a home @ TALOJA (Navi Mumbai) so can I take benefit both HRA & section 24.

    Reply
    • January 14, 2014 at 2:28 PM
      Permalink

      Hi Suchit,

      Yes you can. But you should be prepared for proving clarification in case there is any requirement comes from IT dept regarding you are staying in a rented accommodation though you have your own house in the same city.

      Reply
  • January 14, 2014 at 3:56 PM
    Permalink

    Hi Soubhagya ,

    I have a little confusion, although there are similar questions already put up but let me put my scenario.

    I am living with my family in Delhi. I am claiming HRA by showing the landlord as my mother (owner). Now, I am planning to take a home in the same apartment where i am currently residing. And, the interest amount for a year will be approx 3 lacs.

    So, for surely as per the above posts i can claim tax benefits on HRA and interest part. But, the interest part is limited to Rs. 1,50,000 and my interest amount is Rs. 3,00,000. And, what if i my home as a rented house to somebody with a lower rates let say 3,000 per month. So, the total interest amount in which I can claim will be Rs. 3,00,0000 or is there any other calculation on this?
    And, is there any objection to pay 20000 as rent to my mother and take 3000 as rent amount in the same apartment. Will that make any offense in the law?

    Thanks

    Reply
    • January 14, 2014 at 4:49 PM
      Permalink

      Hi Manish,

      It shows a clear discrimination of rent paid and received for the similar accommodation in the same building. This is quite conspicuous in the eyes of tax officer. You should keep the rent amount at least matching both the figures i.e. payment and received.

      Reply
      • January 14, 2014 at 5:02 PM
        Permalink

        Is there any other option through which i can claim both. Or do i need to choose another location to buy the home.

        Reply
        • January 14, 2014 at 5:53 PM
          Permalink

          It looks second option is better.

          Reply
  • January 15, 2014 at 7:46 PM
    Permalink

    I own a house property registered jointly with wife name and having 1st name on the sale agreement.She is house wife & no income source.Whether can I avail both tax benefits under sec 10(13a) and 24b

    Reply
  • January 15, 2014 at 7:55 PM
    Permalink

    I own a house property registered jointly with wife name and having 1st name on the sale agreement.Housing loan EMI is being paid by me only.She is house wife & no income source.Whether can I avail both tax benefits under sec 10(13a) and 24b.

    Reply
    • January 15, 2014 at 10:13 PM
      Permalink

      Hi Kishore,

      Since you are paying EMI then you can claim complete benefits of interest deductions. But with the limited information provided by you I can not tell anything more about HRA claims.

      Reply
  • January 16, 2014 at 4:30 PM
    Permalink

    Hi,
    I have a query.

    I have taken home this year.
    My loan is started from September,2013.

    I have interest component of 2 lac.
    Till that time I was staying in rented home.

    Can I apply for HRA exception (from April to August) and interst (1,50,000) together?

    Reply
    • January 16, 2014 at 4:46 PM
      Permalink

      Hi Satish,

      Yes! you can claim HRA (from April to August) plus interest (Rs. 1,50,000) together. Cheers!

      Reply
  • January 16, 2014 at 4:42 PM
    Permalink

    Hi Soubhagya
    I own a property in Bangalore and i am paying EMI and also I am paying rent for my mom who stays in a different state.. Can i claim HRA for this?

    Thanks in advance

    Reply
    • January 16, 2014 at 4:48 PM
      Permalink

      Hi Prabhakran,

      You can claim HRA benefits for the rent paid for your accommodation in the city where you are employed.

      Reply
  • January 17, 2014 at 2:07 PM
    Permalink

    I owned a house in the past and sold it a year ago. Can I still claim the interest that I had paid before taking possession of the said property (under provision of claiming exemption for next 5 years (20% of the total interest accrued each year)?

    Reply
    • January 17, 2014 at 3:05 PM
      Permalink

      Hi Susheel,

      You can claim interest paid as deduction on the loan amount paid during the financial year in which you sold the property.

      As per me, in case of pre-construction interest only 1/5th can be claim during 5 assessment year.

      Reply
  • January 17, 2014 at 2:14 PM
    Permalink

    There is one more query…. I own a property and likely possession is in Feb or March this year. In order to claim interest paid on the home loan for the said property, what documents do I need to furnish? Can final demand letter and notice for acquiring possession issued by the builder serve as documents in support of possession of the property or possession letter issued by the builder after clearing all dues has to be necessarily furnished? Please suggest

    Reply
    • January 17, 2014 at 3:09 PM
      Permalink

      Hi Susheel,

      You may need completion or possession certificate to claim interest deduction.

      Reply
  • January 21, 2014 at 4:15 PM
    Permalink

    Hello Mr. Patra,
    First of all, a big thanks for sharing such useful info!
    I am working in Blore and have purchased a flat in Jul 2013 jointly with my wife. This flat is near to my rented apartment and currently in construction, with a target completion date of early Mar 2014. However the builder wants me to register the flat and it seems if I do so he will finish it even earlier by Feb mid. Might be builder’s way of getting the last bit of money quickly. Here are my queries
    1. Can I claim HRA for Apr 13 – Mar 14 as even in get the house from builder by Feb/ Mar 2014 I will have to do woodwork etc and the house will be liveable only after a couple of months.
    2. Can I claim the Interest around 3 lacs fully or it has to be 1.5L only.
    3. What documents I need to claim the interest
    4. Can my wife also claim the interest, if yes how much. The EMI is paid from my account and she transfers her share into my account every month. How much can we claim individually
    5. Can me and my wife claim the principal repayments as well. I have already exhausted my 80C limit so can the entire thing be claimed by my wife
    Thanks a lot!

    Reply
    • January 21, 2014 at 6:48 PM
      Permalink

      Hi Abhi,

      Find the answers in sequence to your queries;
      This is confirmed till Jan’14 you will get HRA. Post construction you may show the house property as let-out and continue to claim HRA.
      As I have replied to other such queries (if you wish to claim HRA till end March) that you need to prove your point of staying in rented accommodation even if you have own house property in the same city.

      2. If you show it as let-out property then full interest repayments can be claimed, else it has to be capped on Rs. 1,50,000 as self occupied.
      3. Completion certificate would be enough or may be Possession Certificate will do.
      4. If your wife contribute towards repayment (directly or indirectly doesn’t matter) or she is a part beneficiary of the rental income then there will be no problem in getting claims in her name as well. You both claim 50-50 for interest repayment and equal portion of rental income has to be added to both of your income.
      5. If everything (like repayments, ownership) is showing as jointly then your wife can claim only 50% of Rs. 1,50,000 as under 80C as self occupied property.

      Reply
  • January 22, 2014 at 11:49 AM
    Permalink

    Hi Mr. Patra,

    Thanks for the showing path to everybody.

    I live in Delhi and purchased a Property(Land) in Greater Noida in 2013. I have taken a home loan in 2013. My first emi is deducted from Aug 2013. Before that pre emi interest has been deducted. Also, I am living in the rented accommodation till now.

    The Data of Home Loan is-

    PRINCIPAL COMPONENT Rs 18,843.89
    (exclusive of insurance)

    INTEREST COMPONENT Rs 1,68,352.83
    (exclusive of insurance)

    PRE-EMI INTEREST Rs 14,167.00

    Insurance On Home Loan
    Principal received during the year is Rs 202
    Interest received during the year is Rs 1,809

    My Query is:

    1)Can I claim the Interest paid (1.5 lakh) along with HRA? If Yes, How?

    2)Can I claim HRA for Apr 13 – Mar 14 or for partial year? If Yes, How?

    3)About Sec 80EE – Can I claim interest paid in addition to the existing tax benefit of Rs 1.5 lakh as it was my first property(my loan amount is 24 Lakh and property value is below 40 Lakh). The Interest paid in addition of Rs 1.5 lakh is 18,000. what about the balance limit of 1 Lakh (1 lakh-18,000)?

    4)Can I claim pre emi interest which I paid (Rs 14,167)? If Yes, How?

    5) What about the Principal and Interest paid on insurance amount?

    Can I claim the income tax benefit on all the above at the same year? Please guide me on the above.
    Thanks in advance.

    Reply
  • January 22, 2014 at 1:37 PM
    Permalink

    Hi Mr. patra,

    I am from Bangalore. I have a slightly different problem. I ahve built an independednt house recently having 3 portions. 2 portions are let out and 1 poertion is used by myself. Now can I claim loss on house property proportinatley on the area let out as well as housing loan interest benefit on the area used for self under self occupied property? Your help is much appreciated

    Reply
    • January 22, 2014 at 10:24 PM
      Permalink

      Hi Ravi,

      You can very well claim loan interest benefits for the let out portion. Normally in such scenario the house property will be treated as 3 separate units for calculation of income from house property. For example; if total interest paid for the loan on the whole building is Rs. 3,00,000 for the FY then Rs. 1,00,000 each you can adjust from the rent received from the let out properties respectively. Similarly any municipal taxes paid will get allocated proportionately.

      Do note, you will not be eligible for the municipal tax paid for the portion which is being self-occupied. Interest claim for self-occupied house property will have be capped at 1/3rd of total interest or Rs. 1,50,000 whichever is less.

      Hope I clarified your query.

      Reply
  • January 22, 2014 at 8:31 PM
    Permalink

    Hi Mr. Patra,

     

    Thanks for the showing path to everybody.

     

    I live in Delhi and purchased a Property(Land) in Greater Noida in 2013. I have  taken a home loan in 2013.  My first emi is deducted from Aug 2013. Before that pre emi interest has been deducted.  Also, I am living in the rented accommodation till now.

     

    The Data of Home Loan is-

     

    PRINCIPAL COMPONENT                              Rs 18,843.89

    (exclusive of insurance)

     

    INTEREST COMPONENT                                Rs 1,68,352.83

    (exclusive of insurance)

     

    PRE-EMI INTEREST Rs                     14,167.00

     

    Insurance On Home Loan

    Principal received during the year is Rs 202

    Interest received during the year is Rs 1,809

     

    My Query is:

     

    1)Can I claim the Interest paid (1.5 lakh) along with HRA? If Yes, How?

     

    2)Can I claim HRA for Apr 13 – Mar 14 or for partial year? If Yes, How?

     

    3)About Sec 80EE – Can I claim interest paid in addition to the existing tax benefit of Rs 1.5 lakh as it was my first property(my loan amount is 24 Lakh and property value is below 40 Lakh). The Interest paid in addition of Rs 1.5 lakh is 18,000. what about the balance limit of 1 Lakh (1 lakh-18,000)?

     

    4)Can I claim pre emi interest which I paid (Rs 14,167)? If Yes, How?

     

    5) What about the Principal and Interest paid on insurance amount?

     

    Can I claim the income tax benefit on all the above at the same year? Please guide me on the above.

    Thanks in advance.

    Reply
    • January 22, 2014 at 10:16 PM
      Permalink

      Hi Raj,

      In the very first place you have cleared me that it’s a loan on a property i.e. Land, so in this case you will not be eligible for any interest & principal repayment as deduction under the act. To claim these you need to build house on it and the same should be completed before the end of the financial year 2013-14.

      But yes! you can continue to claim HRA benefits and it will be for the full year. You just need to show rent payments receipts and Pan of landlord.

      Reply
      • January 23, 2014 at 10:18 AM
        Permalink

        Thanks for the reply.

        Suppose, If I complete the construction before financial year end and still continue to live in Delhi on rent, then please guide me on the tax benefit on the same situation which I have previously asked.

        Thanks

        Reply
        • January 23, 2014 at 1:47 PM
          Permalink

          Then of course you will get all the benefits. You can claim HRA exemptions as well as deduction of full interest amount on borrowed capital for the FY 2013-14 subject to you are showing it as let-out.

          Reply
  • February 3, 2014 at 2:23 PM
    Permalink

    Dear All,
    I have cone question on HRA Claiming. Me and my father has taken a new house in Mumbai on Joint name. My name is second name in the property deed so I dont have any autorization. But I had taken a loan for the same and paid.

    So can I claim HRA in this case as this house is on my Father name ?
    Please need your expert views for the same.

    Reply
    • February 4, 2014 at 3:47 PM
      Permalink

      Hi Pratik,

      If you are an owner (even if part owner), I don’t think you will be able to get HRA exemption benefits for the same property.

      Reply
  • February 3, 2014 at 4:08 PM
    Permalink

    Hi,
    I am living in my own house in Trichi and have taken 2 home loans, one for another flat in Trichi, second for an apartment in Bangalore. If I keep staying in the house that I am staying now, how much income tax rebate can I get on interest paid on these 2 home loans?
    (i) If I keep these houses vacant occasionally visitng them?
    (ii) If I rent one of them out?
    Thanks

    Reply
    • February 4, 2014 at 3:56 PM
      Permalink

      Hi Rama,

      You currently own three houses, in such case you can show current staying house as self-occupied (claim Rs. 1.5Lacs interest u/s24b and principal u/s 80C of Rs. 1Lacs at max) and you can show other two houses as let-out where you can claim entire amount of interest paid u/s 24b for the financial year.

      If you are keeping these houses vacant then you need to show notional rent for the purpose of calculation of income from house property. In case of actually being let-out also goes in the same manner, but the difference is; you need to take actual rent received or receivable for tax computation. So better to let them out and pay tax one actual rent received rather notional income. Cheers!

      Reply
  • February 3, 2014 at 4:09 PM
    Permalink

    Hi,
    I have own property in Noida which is under construction and I am staying in Gurgaon on rent.
    And I am paying rent and full emi of my flat.
    Can I claim both HRA and Home loan EMI?
    Thanks
    Varun

    Reply
    • February 4, 2014 at 4:02 PM
      Permalink

      Hi Varun,

      You can claim HRA, but not loan benefits for tax purpose. For this, construction needs to be completed in this financial year only i.e. before March 2014.

      Reply
  • February 4, 2014 at 11:55 PM
    Permalink

    Hi,

    I have already one home loan and shown that property to be let out and claiming tax benefit on principal+interest-rented income.

    I am staying in rented accommodation in same city and claiming HRA for it.

    Now I am planning to buy 1 more flat in same city and will be taking home loan on it and planning to rent it out this as well.

    Question – Can i show both of my property on let out and avail tax benefit on principal+interest-rented income and continue in my rented accommodation in same city and claiming HRA for it ?

    Reply
    • February 5, 2014 at 9:53 AM
      Permalink

      Hi Aditya,

      I don’t think it’s a right idea to take HRA exemption benefits and have deduction of interest on borrowed capital as let-out for the same city unless you have some valid reason to opt for rented accommodation.

      If you own two houses then you can choose to show one house as let-out and other as self-occupied.

      Reply
      • February 5, 2014 at 9:08 PM
        Permalink

        Thanks for your comments. I just want know whether anywhere tax regulations say that if i hv 2 house loans in same city than i cannot stay in rented accommodation and can avail HRA Benefits.

        Reason can be straight forward – both of my properties are in outskirts and the place where i am staying on rent is situated in heart of the city.

        Thanks.

        Reply
        • February 6, 2014 at 8:41 AM
          Permalink

          Hi Aditya,

          Many things has been stated in the rule book, but the interpretation should be with logical reasoning. Since both the houses are in outskirts and very far from your work place (I assume) then you may show both as let-out and continue to claim HRA exemptions for the rented accommodation you are staying in.

          Reply
  • February 10, 2014 at 10:38 PM
    Permalink

    sir,
    my husband and i took home loan on a property owned by my husband. as i am a teacher(govt.), do i have the right for tax deduction?

    Reply
    • February 11, 2014 at 2:11 PM
      Permalink

      Hi Leena,

      If you are co-holder for the loan then you can surely claim deduction for the loan repayments.

      Reply
  • February 13, 2014 at 10:58 AM
    Permalink

    Hi Sir

    Me and my wife buy a home in gurgaon and given on rent and She paid downpayment for home and i am paying all emis of homeloan so now
    could i took benifit of tax on home loan(1,50,000 of intrets and 1,00,000 for principle every year ) and all rented income will be shown as income of my wife only and not mine at all.
    And as we are living with our parent in delhi and i am paying rent to them so will I be entitle for HRA as well?

    Thanks
    nitin

    Reply
    • February 13, 2014 at 5:04 PM
      Permalink

      Hi Nitin,

      If this house property is being let-out then no deduction with regards to principal payment is allowed. You can claim entire interest paid during the FY under income from house property net of rental income along with standard deductions of 30% on total rent received.

      Please note, if your spouse is claiming all income from rent then she needs to adjust full interest amount from this else complete rent and interest payments has to be divided among both of you and claim proportionately.

      Reply
  • February 14, 2014 at 7:37 PM
    Permalink

    Sir I m posted in Shillong City . I M AVAILING HRA in Shillong. But my parents are living In Jaipur . MY parents are dependent on me..So I m AVAILING HRA FROM office as per rule to my parents in Jaipur. Can u tell me that I can REBATE IN both HRA OR IN SINGLE HRA.Please rply me…

    Reply
    • February 16, 2014 at 9:29 AM
      Permalink

      Hi Meena,

      You can get benefits of HRA exemption basis the rented accommodation situated in the city where you are employed.

      Reply
  • February 20, 2014 at 3:23 PM
    Permalink

    I have a taken a flat possession would be given by March-14, I have a takan a loan (in Mid-2010) with my wife for this property. presently we live in a rented house. my wife is a house wife & has no other income. now please let me know.
    1) from the previous posts I can understand that I can claim both HRA and loan Interest &principle exemptation, pls confirm
    2)As my loan started in 2010, so the interest part is definitely going to be >1.5 lacs, please let me know.. in what way I can claim for entire interest part (possession would be given post-Mid-March & I am staying in rented house).
    3) Is there any benifit if I make my wife as a co-owner (apart from registry amount that I would save), she is a co-borrower in the loan (but almost all EMIs has been paid by me)she is a house wife.

    Thanks in advance.

    Reply
    • February 20, 2014 at 8:22 PM
      Permalink

      Hi Vipin,

      Find answers in sequence to your queries;
      1. Yes you can, but it depends on whether your scenario is related to any of above (as stated in the article) mentioned situations.
      2. If the said house property has been put for let-out or treated as deemed to be let-out (doesn’t matter whether a part or full year) then yes! you can claim full interest paid for the year.
      3. Since your wife has no income, then any income from this house property will have lower tax liabilities as total rental income will be divided basis ratio of ownership. But remember, if rental income is divided among, then Interest deduction has to be distributed between both of you. This means you can not claim 100% of interest keeping your wife to take full/part of the rental benefits.

      Reply
  • February 21, 2014 at 11:22 PM
    Permalink

    Hi Soubhagya,
    As i would be getting the possession near the FY end (by mid or end of March, so hardly a matter of 10 to 15 day, it will need many thing to be done to make it liveable as it woudl a raw flat, without any wodden work etc..) so for this year I assume that no question of self occupation or renting it out arises. and I assume that I would be able to get HRA and interest part (without 1.5 lacs cap) exampted. hope my understanding is correct.

    Reply
  • February 23, 2014 at 4:40 PM
    Permalink

    DearSoubhagya,

    I am having own flat in Pune City ( it is under Loan , and Paying EMI ) and also staying my family in own house , since I am working in outskirt area 80 km from own house , so that my self only taken one small flat near to Factory area and paying Rent Rs.6,000 /- p.m .and use to stay 3/4 day in a week. Please advice me , can I take Income tax benefit both HRA and House loan.

    thanks,

    Reply
    • February 23, 2014 at 9:47 PM
      Permalink

      Hi Satya,

      Yes you can! Read situation 3. It may answer your query.

      Reply
  • February 25, 2014 at 3:16 PM
    Permalink

    I have taken Home loan. That is me and my mother are partner for this, can i pay rent to my mother and take HRA and Home loan Interest exemption

    Reply
    • February 25, 2014 at 6:44 PM
      Permalink

      Hi Manjunath,

      In this case you can not take HRA exemption benefits if you are a part owner of the property (I assume).

      Reply
  • February 26, 2014 at 7:33 PM
    Permalink

    Dear Soubhagya,

    I am staying in Hyderabad in my own flat and claiming Tax benefits for my Housing Loan. Recently my mother moved to Kolkata. I had rented a flat in my name for her in Kolkata. Can I claim HRA for the rented house? Thanks in advance.

    Reply
    • February 28, 2014 at 7:39 PM
      Permalink

      Hi Sugata,

      If you are working in Hyderabad then you can not claim HRA benefits for Kolkata house taken for rent.

      Reply
  • February 27, 2014 at 9:37 PM
    Permalink

    Hi ,
    I claimed my HRA and Home loan together . I live in delhi and working in MCD as a teacher, but my office officials denied to accept this , they demanded me to any written rule for this that I can claim both HRA and Loan exemption together, I presented a Internet blog rule n condition regarding this but still that illiterate official denied.
    Any body can tell me or provide me any proof of this rule from any trusted govt. site i.e. incometax department.

    Reply
    • February 28, 2014 at 7:33 PM
      Permalink

      Hi Pravesh,

      There is nothing specifically stated that both HRA and Home Loan benefits/deductions can be claimed under so and so circular no of CBDT. These two deductions/exemptions have been explained in two different section i.e. u/s 10(13A) and u/s 24b respectively. Basis certain situation or scenario (as state in the article), both of these can be claimed together. If the official is not agreeing to this then you may look for claiming refund while you file your IT returns.

      Reply
  • March 3, 2014 at 4:18 PM
    Permalink

    Hi,
    I have a question on tax emaption limit for home loan interest paid.
    I purchased a home in Trichy and payiny EMI for the same and My parents are staying in the purchased home in Trichy.
    i am staying in rented house chennai due to employment constraint. So i am claiming HRA for the rented hous in chennai.
    For this yer, i paid Rs.2.5 Lacks for home loan interest.
    What is the maximum excemption limit for Home loan interest? i.e 2.5 Lakhs.

    Reply
    • March 3, 2014 at 4:59 PM
      Permalink

      Hi Muthu,

      Since your parents are staying in the purchased house (which I assume they are not paying any rent to you) in Trichy, in such case you need to claim it as self-occupied (even though you are not staying) and continue to claim HRA exemption benefits. Here interest deduction limit will be Rs. 1,50,000 as self-occupied.

      Reply
  • March 7, 2014 at 4:51 PM
    Permalink

    hello
    actually i wanna ask that if a person owns 3 house properties in his name but he is is residing in a rented house for the pupose of his job in that place. So,whether he can claim exemption of HRA and interest on housing loan or not?

    Reply
    • March 7, 2014 at 6:14 PM
      Permalink

      Hi Mohit,

      Yes! he can, as long as said reasons for staying in rented accommodation are valid.

      Reply
  • March 18, 2014 at 6:57 PM
    Permalink

    Hello Soubhagya,

    Greetings !!!

    I am presently working in Mumbai and staying on a rented accomodation for which i have been claiming HRA. I bought a house in Ahmedabad 2 years back which i have not self occupied as i work in Mumbai. I have not given that on rent either.

    Last year i bought a house in Mumbai – Mira Road of which i got the possession a month ago. My job is in Malad and my rented accomodation is in Malad. So i would continue staying on rented accomodation and already given my mira road house on rent.

    So i have two home loans overall. One for the house in Ahmedabad and one in Mumbai.

    My questions are:

    1. can i claim tax rebate on intestest component for both of these houses?
    2. What if i give Ahmedabad house also on rent, can i claim tax rebate on both the houses or at least one of them have to be shown as self occupied?

    Thanks.

    Reply
  • March 18, 2014 at 7:08 PM
    Permalink

    In continuation to the above question, i would like to add more more question:

    1. what is the way in my above mentioned case where in i can claim HRA and rebate on home loan interest for both the loans.

    I continue to stay on rented house as my house in Mira road is far from my office in malad.

    Reply
    • March 19, 2014 at 7:10 PM
      Permalink

      Hi Aalap,

      Since your office location is far away from your own house, it may give you the favourable opportunity to claim both HRA exemption benefits as well as 100% deduction of interest paid on borrowed capital for both the houses i.e. Mumbai and Ahmadabad.

      In other scenario, if your Ahmadabad house is not actually rented-out, then you may show this as self occupied u/s 23(2) (read situation 3 given in the article) where you can show 1 house as self occupied, another as let-out and take HRA exemption benefits for the rented accommodation.

      Hope I clarified all your queries.

      Reply
  • March 20, 2014 at 11:07 AM
    Permalink

    Thanks as lot Saubhagya !!

    Does it really mean if i rent out my both the houses and continue staying on rented accomodation, i can get tax rebate on both the house on interest component?

    My understanding was that in case of two houses, one of the house has to be shown as self occupied and other as a let out property.

    Besides this, some one in this post had mentioned that he owns 3 houses and staying on rented accomodation. You replied he can get tax rebate on all houses. There is no limit as to number of houses you can claim tax rebate on?

    Reply
  • March 26, 2014 at 9:50 AM
    Permalink

    Dear Soubhagya,

    I own a 1 bhk apartment in an old building without lift in Mumbai. As mine is a joint family including my old mother, father, wife and child, I have rented a 2.5bhk in the next builiding for better living as its a new building with lift and other amenities and more space to cater to the family needs. I have given my apartment on rent and am paying tax on the rental income from that house. My question is that can I claim HRA on the bigger apartment which I have reneted in the next building given the fact that it is in the same locality?

    Reply
    • March 26, 2014 at 4:47 PM
      Permalink

      Hi Sachin,

      You may get HRA exemption benefits and there will be high chance that your return will be processed, but in case of any scrutiny arise you need to justify the same to AO.

      Reply
      • March 27, 2014 at 10:28 AM
        Permalink

        Many thanks for your response.

        Reply
        • March 27, 2014 at 3:57 PM
          Permalink

          You are most welcome!

          Reply
  • April 5, 2014 at 12:31 AM
    Permalink

    i work in mumbai and live in my own house here. but i frequently travel to delhi for work and stay with my parents. can i claim HRA if i actually pay rent to my parents for staying in delhi.

    Reply
    • April 5, 2014 at 5:23 PM
      Permalink

      Hi Kumar,

      You can not claim HRA for rent paid in Delhi, because your employment city is Mumbai. If expenses are incurred for work purpose, then you should claim reimbursement (if your employer has this provision).

      Reply
  • April 7, 2014 at 2:51 PM
    Permalink

    I wanted expert help on the following:

    Description: Have an existing home loan in Mumbai. Taken approximately 5+ years back, with myself and my father being co-borrowers.Recently took another home loan for a home in Goa (where I work). Possession expected in the month of May 2014. Presently staying on rent and claiming HRA as well as Principal and Interest (50%) for the home loan in Mumbai.

    Questions:

    (1)My marriage was registered in Goa in 2013. Apprently according to the Portuguese Civil Code, there is a 50% division of assets (I am fine with this) and income tax benefits (not ok with this). My CTC being significantly higher than my wife’s I would like to have more share of the income tax benefits with respect to the home loan.

    I am not a Goan, born and brought up in Mumbai/ Maharashtra. My wife though is a Goan (born here). Am I eligible for 100% Home Loan Principal and Interest benefits in that case then?

    (2) I am working in Goa, and have two home loans now. Mumbai and Goa. The interest outgo for the latter home loan (Goa) is significantly higher. Hence would like to show that one as let out and the Mumbai home as Self occupied. Would I be allowed to do this since I work in the same city as the one I am planning to show as let out?

    I will claim that I am living on rent since its nearby to work place (although its only a max of 3 KMs difference between the house being shown as let out and the one I am staying on rent), to stay with in-laws as joint family etc. Would that be a valid reason? Am I eligible for HRA benefits here?

    (3) Planning to go for a company car. What will the tax benefits be?

    Reply
    • April 11, 2014 at 8:35 PM
      Permalink

      Hi Sandy,

      If your Goa property is completely owned by you and any rental income received ( or expected income) is not going to your spouse then I must say you are eligible for 100% interest deduction benefits as per IT purpose.

      Since you own two houses, you are free to decide which one you want to show as let-out and which one as Self-Occupied, but the problem here is; you indicated you work in GOA and recently purchased house which is also situated near to your office, so it may be difficult for you to take HRA and Home Loan benefits if reasons are not satisfied by your employer and then Assessing Officer.

      With regards to using Company Car, it provides benefit of having reduced prerequisite tax.

      Reply
  • April 15, 2014 at 10:28 PM
    Permalink

    I am staying in Bangalore (Rented house) and my parents are staying in another city (rented house). Can I claim HRA for both the houses? Since I am the one paying rent for both the house.

    Reply
    • April 16, 2014 at 10:40 AM
      Permalink

      Hi Premkumar,

      You can get HRA benefits for the rent paid towards Bangalore accommodation only. You must be getting blessings from your parents for making rent payment for their stay. What else you need!

      Reply
  • April 18, 2014 at 11:42 PM
    Permalink

    Hi. I understand that if the property is self occupied, then the limit for the tax benefit that can be availed is a maximum of 2.5 Lakhs (Principal and Interest together) and that there is not limit if the property is rented out. What will be the case in the scenario that I build a 2 storey house in my plot, rent out the ground floor and live in the first floor? Will I have a maximum limit on the benefit that I can claim or is there no limit?

    Reply
    • April 19, 2014 at 9:07 AM
      Permalink

      Hi Venkat,

      In such cases both self-occupied and rented portions will be treated as two separate units for the purpose of calculation of income from house property. All the repayments (principal & interest) will be divided between two units. Basis this self-occupied house will have interest and principal deduction upto the specified limits. Let-out unit can have only interest deduction i.e. upto actual payment.

      P.S. I do not advice this as it sometime looks to be a strategy of Tax Avoidance.

      Reply
  • April 22, 2014 at 3:24 PM
    Permalink

    Hi ,

    I am working for a company in Gurgaon (Haryana). I am staying in a rented house in haryana which is near to my office. I have two flats(in Ghaziabad & Delhi) for which I have taken home loan.If I am not staying in both the houses for which i have taken loan and given only the ghaziabad property on rent to my father and delhi property is lying vacant and is expected to have tenant in future.,

    1) Can I avail tax benefits on both home loans.I would be more interested in the “interest ” part of both (delhi & Ghaziabad) the property home loan. (As 1 lac limit for 80C is already consumed by my LIC and tution fees of children)
    2) Can I also avail HRA for the Gurgaon house for which I am paying Rs 18,000 per month rent

    I can show rents on both houses as my income and can I get HRA benefit too as I am staying in rented home?

    Pls guide me to save maximum tax.

    Thanks,
    Basant

    Reply
    • April 22, 2014 at 5:47 PM
      Permalink

      Hi Basant,

      “Yes” is the answer for all your queries.

      Reply
  • April 28, 2014 at 9:42 AM
    Permalink

    Hi
    My question is
    I have two properties in delhi, out of which in one property my parents are staying and I have let out one property and I am staying in a rented accommodation in Pune as my present job location in pune. Can I claim rent benefit, housing loan benefit and let out property benefit?

    Reply
    • April 28, 2014 at 3:17 PM
      Permalink

      Hi Sagar,

      You can claim Delhi house property as self-occupied and take interest deduction upto Rs. 1,50,000 u/s24b and principal deduction u/s80C upto Rs. 1,00,000. Since you are staying in a rented accommodation (in Pune) which is due to job requirement, you can very well claim HRA deduction for the rent paid as per the specified limit. I suggest you to read situation-3 to get more clarity about this.

      Of course nothing stops you to claim 100% interest deductions paid towards borrowed capital from the let-out house property, but you can’t calim anything on 80C. Any rental income from this property has to be declared and pay taxes accordingly.

      Hope I clarified all your queries!

      Reply
  • April 28, 2014 at 7:50 PM
    Permalink

    Hi,
    I have home loan of RS 35 Lacs . The property is under construction and hopefully I will have possession by September this year. I am currently staying in Rented Flat. Can I claim both HRA and Interest on Housing Loan under section 24.

    Reply
    • April 28, 2014 at 8:40 PM
      Permalink

      Hi Manish,

      Once the construction is completed you will be eligible to take interest deduction benefits. After completion of the construction (which you indicated is Sept’2014) if you occupy it, you can claim HRA upto Sept’2014 and interest paid for the entire financial (including 1/5th of total interest paid till Mar’2014), but upto Rs. 1,50,000 u/s 24b as allowed for self-occupied house property.

      Reply
      • May 6, 2014 at 2:43 PM
        Permalink

        Mr. Patra,
        Thanks for response.
        1. Can i let out the owned property and claim actual interest paid ?
        2. Do i need to deduct rent received from actual interest paid claim?
        3. Can i also claim Rs 1 lakhs as principal amount payment?

        Request you to please provide clarity on the above.

        Reply
        • May 11, 2014 at 10:26 AM
          Permalink

          Hi Govind,

          1. As I have indicated in many responses that there should be a logic as why you are letting out your own property then only you can proceeds which is acceptable.
          2. Yes! Rental income has to be adjusted from interest paid on borrowed capital.
          3. Principal claim for deduction is not allowed if you are showing property as let-out.

          Reply
  • April 30, 2014 at 6:41 PM
    Permalink

    I have owned house which is not self occupied (vacant) and I am paying Rs 5,00,000/- interest. Currently i am staying in rented flat in the same city and paying rent to owner. Can i claim full amount of interest as tax free and HRA for tax free? What is the minimum notional house rent on owned house for which i have to pay tax after deduction for municipal taxes.
    Please help in this regard and provide your comments.

    Reply
    • April 30, 2014 at 11:24 PM
      Permalink

      Hi Govind,

      If you do not have a justifying point (to assessing officer) as why you are staying in rented house even though you have a house (ready to occupy) in the same city, I don’t think it will be a right idea taking HRA benefits and 100% interest deduction towards interest paid on borrowed capital just by showing some notional rental income.

      Reply
      • May 9, 2014 at 10:32 AM
        Permalink

        In such scenario, Can I Claim loss on let out property (full Interest paid in FY + Maintenance & Property Taxes – Rent Received) ?
        I understood one can not claim HRA being in same city.

        Reply
        • May 11, 2014 at 10:30 AM
          Permalink

          Hi Govind,

          Maintenance is not allowed to claim/adjust as deduction.

          Reply
  • May 6, 2014 at 2:58 PM
    Permalink

    Mr. Patra,
    Thanks for response.
    Request your advise on following
    1. Can I claim actual intrest paid on owned let out property?
    2. Do I need to deduct rent received from actual interest before claim?
    3. Can I also claim Rs 1 lakhs as principal paymet paid for the property?

    Looking for response…

    Reply
    • May 11, 2014 at 10:29 AM
      Permalink

      Hi Govind,

      1. As I have indicated in many responses that there should be a logic as why you are letting out your own property then only you can proceeds which is acceptable.
      2. Yes! Rental income has to be adjusted from interest paid on borrowed capital.
      3. Principal claim for deduction is not allowed if you are showing property as let-out.

      Reply
  • May 12, 2014 at 2:30 PM
    Permalink

    Dear sir,

    VERY CLEAR AND NICE REPLIES

    i Am staying in a rented house in bangalore, I have purchased a house which is under construction, i have applied a loan for 30 lakhs ( the emi is is approx 29500 per month)The loan provider company has asked me with two option

    1. pay the total money per month 29500

    2. or only the interest based on the amount released to the builder, which shall be intially less and later reach the full value nearing the completion

    After the entire value is completely claimed by the builder , the monthlyEMI option mode shall start

    My question is whether i am eliglible for HRA as well as the interest alone paid till completion

    please clarify sir, thanks for your reply in advance

    Reply
    • May 13, 2014 at 12:43 AM
      Permalink

      Hi Sureshbabu,

      No benefits of Interest claim under section 24b and deduction with regards to principal repayment under section 80C will be allowed until the construction is completed. But Yes! you can continue to get benefits of HRA till construction completes.

      Reply
  • May 21, 2014 at 12:11 PM
    Permalink

    Hi Soubhagya,

    Thanks for the nice and informative article!

    I am working in Hyderabad and owning a house (On loan, paying EMIs) here. However, because of some compulsion, I am staying in a rented house. Since I can not stay in my own house, I have left is unoccupied.

    I own another house in Pune for which the loan was paid up last year. This house is left unoccupied as I use it for my own family stay when in Pune.

    Can I claim HRA exception and Interest deduction benefit for Hyderabad house at let out property rate?

    Reply
    • May 21, 2014 at 7:47 PM
      Permalink

      Hi Pankaj,

      I think you can take HRA benefits with such exceptions. And yes! you can very well take interest deductions on borrowed capital for the Hyderabad house as you own two houses and you are left with the options to choose one house as self-occupied and another as let-out.

      Reply
  • May 28, 2014 at 4:00 PM
    Permalink

    I’m working in bangalore. My house is located in different city and it’s let out property. Am i eligible to get tax exemption on full interest paid ? .

    Reply
    • May 29, 2014 at 5:45 PM
      Permalink

      Hi Prabu,

      Yes! Of course. You can enjoy both HRA (if staying in rent) and full deductions for interest paid towards borrowed capital for the house property located in other city. But, remember, you need to pay tax on the rental income earned net of municipal taxes and standard deduction. You can adjust interest part from the net rental income from the house property.

      Reply
  • June 2, 2014 at 10:06 AM
    Permalink

    Hi,
    I say in shared basis with employees near to my office.
    My parents and family is staying in different location. I pay rent to that house also.
    can I claim the HRA for my stay and additional exemption for my parents stay??

    Reply
    • June 2, 2014 at 11:33 PM
      Permalink

      Hi Vikash,

      You can’t take HRA exemption benefits for the rent payments made towards your parents stay.

      Reply
      • August 1, 2014 at 5:15 PM
        Permalink

        Dear Sir,

        The Property in which we are staying registered in the name of ME, My Wife and my mother. My wife is gov employee and claiming HRA as rent receipt signed by mother. Can she get the HRA benefit and also please confirm if her name registered for this property then still she will eligble for HRA by gov dept?

        Reply
        • August 1, 2014 at 10:07 PM
          Permalink

          Hi Sachin,

          Your wife is one of the owners of the property. In such case taking HRA exemption benefits will not be a good idea. If she is not staying in Govt provided quarter then she will be eligible to receive HRA, but the same will be taxable.

          Reply
  • June 10, 2014 at 11:10 AM
    Permalink

    Hi Soubhagya,
    Extremely well written article.
    I have a query. I own a property in Thane (Property A) which has been let out. I also own another property in Mumbai (Property B) which has also been let out. I stay in a rented property in Mumbai which is very close to my office. Can I claim deduction of interest on home loan of entire amount in both the properties (around Rs. 3 lacs in Property A and Rs. 6 lacs in Property B) and also claim HRA benefit for staying in rented property in the same city where I own a property?
    Please revert at the earliest.

    Reply
    • June 10, 2014 at 5:29 PM
      Permalink

      Hi Sandeep,

      Unless there is a logical reason as why you stay in a rented accommodation even though you have your own house property in the same city, it may not be advisable to claim both HRA and interest deduction out of borrowed capital.

      Claiming entire interest from both the house properties may invite IT scrutinisation. Since you own two house properties, you have the option to choose one house as self-occupied and another as let-out. So whichever has got higher interest, you can show as let-out.

      Reply
  • June 13, 2014 at 7:16 AM
    Permalink

    Hi Soubhagya,

    Thanks in advance.

    I am staying in Govt Quarters(my wife is govt employee), I am working in private company.
    Can I claim HRA?

    Thanks
    Manjunath

    Reply
    • June 13, 2014 at 11:53 AM
      Permalink

      Hi Manjunath,

      Here HRA claim will not be allowed.

      Reply
  • July 5, 2014 at 1:34 AM
    Permalink

    Hi Soubhagya,

    I stay in a rented house in Gurgaon ( where I work), for which I claim HRA. I also have 2 house, one in Lucknow ( bought in 2003)and other in Bangalore( bought in 2013). I pay emi for both . Bangalore one is rented and Lucknow one has my parents staying. What can I claim as loss against housing property.
    thx

    Reply
    • July 5, 2014 at 9:41 AM
      Permalink

      Hi Ritesh,

      You need to show Bangalore property as Let-Out (claim 100% of interest deduction after net rental income), Lucknow property as Self-Occupied (Claim upto Rs. 1,50,000 as interest deductions) and continue to claim HRA benefits.

      Reply
      • July 5, 2014 at 11:06 AM
        Permalink

        Thanks Soubhagya,

        You really are doing a great job by helping novices like us…Just one more thing, Can i claim ‘Lucknow’ property as self occupied even if I stay in a different city(Though my parents stay in lucknow))?

        thanks..

        Reply
        • July 5, 2014 at 11:56 AM
          Permalink

          You are most welcome Ritesh.

          And yes, you can show Lucknow property as self-occupied. Do not worry it is very much allowed as per income tax. Read situation 3 as explained in this post above.

          Reply
  • July 6, 2014 at 3:23 PM
    Permalink

    Hi,

    I am currently building a house on a joint property between my wife and me which will be ready by next June.
    Can I claim tax rebates for this financial year and what is the best available option to claim both HRA and home loan benefits.

    Reply
    • July 6, 2014 at 9:12 PM
      Permalink

      Hi Kiran,

      Until construction is completed you won’t be able to claim any deduction with regards to interest & principal repayment.

      Reply
  • July 7, 2014 at 4:44 PM
    Permalink

    sir I am getting HRA from company and taken new home. Can i clam HRA alongwith Interest paid on home loan as i was leaving from 1/4/13 to 31/3/14 as rental and occupied the new home from may’2014. As per form -16 HRA deduction is Rs.149870 and deduction under section 24(b) is Rs.24050/-. TO file ITR where i put the figures of Rs.149870 and Rs.24050/- in ITR form section.
    Please reply

    Reply
    • July 7, 2014 at 6:07 PM
      Permalink

      Hi Rakesh,

      If your occupancy came to effect from May’14 then there is no doubt that you can claim HRA benefits against rent paid for FY2013-14, but I still do not get required information to tell whether you can take the deduction u/s24(b) or not. Wasn’t the house ready to occupy or it was under construction during 2013-14? If so! then you can’t claim any deduction towards home loan repayments.

      Reply
  • July 8, 2014 at 1:47 PM
    Permalink

    Home was under contruction and i have taken loan for whom i have paid Rs.24050/- as interest and Rs.41340/- as repayment on home loan.

    Rs.24050/- will be under deduction or not?

    Reply
    • July 9, 2014 at 9:26 AM
      Permalink

      Hi Rakesh,

      If the house was under construction during FY 2013-14 then you can not claim deduction of interest on borrowed capital while filing return for the AY 2014-15.

      Reply
  • July 11, 2014 at 5:00 PM
    Permalink

    Hi,

    I have a property (flat) and resides as of now. I have a loan on this property. Co-owner is wife.
    Now I am planning for second property in Sept-Oct-14 through bank loan and from nov-14 I want to shift in second home but I don’t want to give first home on rent upto Mar-15. Co-owner will be wife.
    It means will reside from Apr-14 to Oct-14 in first home AND from Nov-14 to Mar-15 in second home.
    First home interest is approx : 1,00,000/- per year
    Second home interest will be Rs. 3,00,000/- per year
    1>. How can I claim interest for both property in this FY 14-15.
    2>. What is the best way to save tax as per above situation.

    Reply
    • July 20, 2014 at 11:54 AM
      Permalink

      Hi Dinesh,

      2nd home will be treated as self-occupied and 1st will be partly self-occupied and partly let-out in terms of months. Since 1st house will be treated as let-out (even not really), you need to declare rent and pay tax.

      Reply
  • July 12, 2014 at 11:35 AM
    Permalink

    Hi,
    Can somebody resolve my following query.
    I have sold of Home and at that time ( In June;14) I had made repayment of loan amount of about 1.5lac and in the month of April;14 ( Two Month Earlier) I started leaving in rented house in same city.
    so I feel , I should eligible to claim both HRA and 80C under repayment of housin loan.
    Can I do that?

    Reply
    • July 20, 2014 at 11:41 AM
      Permalink

      Hi Jaymin,

      Yes, you can.

      Reply
  • July 12, 2014 at 1:25 PM
    Permalink

    Hi,

    I have recently purchased a property via a joint home loan with my mom & expect to get possession in a month’s time. In the meanwhile I have been staying in a rented place an claim HRA exemption benefit from my employer.

    Once I get possession of my own property, I plan to let it out and continue to stay in the rented place since I reside with my friends here.

    In such a case, can I claim benefits of both HRA & Housing Loan interest? I read somewhere, that if I declare my rental income from owned property, this should be possible. Can you please clarify this?

    Reply
    • July 13, 2014 at 5:46 PM
      Permalink

      Hi Sonu,

      You can very well do this if your own house property is in a different city or there is a genuine issue with traveling daily to your work place. Many suggest you to do this even both the houses are in same city, but this would not be a safe game.

      Reply
      • July 13, 2014 at 6:50 PM
        Permalink

        Hi Soubhagya,

        Thanks a lot for your response. I must say you’re doing a great job of helping out people here.

        Can you please elaborate on the “would not be a safe game” bit here? I mean, both – my own property and the rented place I stay in – are in the same city. Also, the only reason I plan to let out my own place & continue in the rented place is a matter of convenience since I stay with my friends here. The distance to my workplace is similar from both properties.

        Can this be considered a genuine reason?

        Reply
        • July 13, 2014 at 11:10 PM
          Permalink

          Hi Sonu,

          This is not a genuine reason as stated.

          It’s a simple thing that, one stay in a rented house because he/she doesn’t have own house property or the said own house property is far or inconvinent to travel regularly to the work place. In your case, even though you have your own house property in the same locality you are still staying in rented house which confirms you are trying to take the advatages of low/no tax deduction by way of HRA:-) This will simply be treated as Tax Evasion and so only I used the term “Not a Safe Game”.

          Reply
          • July 14, 2014 at 6:17 PM
            Permalink

            Hi Soubhagya,

            Thanks for your response!! Appreciate your help.

            I guess, I’ll then have to show my own property as self-occupied then even though I might continue to stay in a rented place.

            Thanks again for clarifying this.

          • July 14, 2014 at 6:23 PM
            Permalink

            That’s good.

  • July 17, 2014 at 2:24 PM
    Permalink

    Hi,
    Nice concise answers. Good knowledgeable forum.

    I have a question.
    I work in Gurgaon (Haryana) and have two flats one in Gurgaon (not let out, but paying EMI on home loan) and other in Pune (let out and paying EMI). Owing to family requirements I now have to stay in Delhi. As my parents are retired I pay rent to my father who claims it as income in his return.
    Can I:
    – claim rent paid in Delhi towards HRA deduction,
    -treat Gurgaon property as self occupied to claim interest on home loan(max 2lakhs now)&
    -treat Pune property as let out claiming all interest paid as I am earning rent on it.

    Regards
    Prakash

    Reply
    • July 17, 2014 at 2:47 PM
      Permalink

      Hi Prakash,

      Answers in sequence to your queries;
      1. Yes of course.
      2. Again Yes of course
      3. Again double Yes 🙂 Cheers!

      Reply
  • July 21, 2014 at 3:37 PM
    Permalink

    Hello Sir

    I live in Blr on rent but have propery in delhi. I have only one property in my name.

    I got possession of my home in March 2014. As I get possession on March, I counld not rent it.
    I have booked this property in Financial year 2010-2011 and paying EMI from that time.

    My questions are
    1. How much interest tax exemption I can claim. Can I claim full exemption for interest paid in 2013-14 and 5 equal installment for previous year interest ( total become more than 1.5 Lacs ).
    2. As I got possession on March, Do I need to show some nominal income fro that property.

    Reply
    • July 21, 2014 at 5:25 PM
      Permalink

      Hi Sachin,

      Answers in sequence to your queries;
      1. Full interest net of rental income received/receivable. Of course 1/5th of previous years(s) as well.
      2. Yes of course.

      Reply
      • July 21, 2014 at 5:41 PM
        Permalink

        Hello Sir

        I did not understand your first answer properly
        1>> Full interest net of rental income received/receivable.
        What do you mean by rental income receiver/receivable. As I only took the possession in March, I did not rent it out.
        2. Do I need to show nominal rent income for complete year or March only.

        Reply
        • July 21, 2014 at 5:46 PM
          Permalink

          Hi Sachin,

          I mentioned it as received/receivable. It could be notional if not actually received.

          Reply
          • July 21, 2014 at 5:50 PM
            Permalink

            Thanks Sir.

            Will it be for complete year or March moth only.

  • July 23, 2014 at 11:14 AM
    Permalink

    Hi Please have a look on my question and kindly guide .

    Thanks,
    Amit

    Reply
  • July 23, 2014 at 11:30 AM
    Permalink

    My Question is as below

    I am staying in a rented house along with my family In Noida only and I have booked a under construction flat in Noida only and distance to my office from both the places is almost same .The actual possession was in sep 13 however it got delayed and now I am expecting the same in Sep-OCT 14 ,but builder will give possession for Few towers and the whole place is not livable and safe for my aged mother and family as still lots of construction work is going around. I am planing to move their in next year only (Jan -feb 2015).

    This year I have claimed HRA as well home Loan benefit both by showing my Flat as ‘deemed to let out’ and showing a Notinal Rent of Rs 8000/month and getting 30% standard deduction on the same and . Now below are my doubts.
    1) Can I claim the Interest benefit for the whole year even if I got the Possession in Sep ,does it has to be any time in the Financial year or its on Pro data basis ?
    2) I have paid around Rs 4 lakhs as Interest on my home loan till 31 March 2014 for the under construction flat ,can I claim(20% of it) along with the Full year Interest .Since I am showing it let out property ,so their is no upper Limit for the Interest deduction ?
    3) Also if answer to First question is Yes or No then accordingly I have to show Notional rent too ? (means if the deduction for the Full financial year then Notional rent for the full year or vice versa ).

    Please suggest

    Reply
    • July 29, 2014 at 10:25 PM
      Permalink

      Hi Amit,

      Answers in sequence to your queries;
      1. You can claim full year benefits even in Sept you get the possession.
      2. Yes, you can.
      3. Answer is Yes. You can go by notional rent things.

      P.S. Your comment had gone into spam and I couldn’t notice till day. Sorry for delay in response.

      Reply
      • August 5, 2014 at 12:57 PM
        Permalink

        Hi Patra,

        Thanks for the help.

        Regards,
        Amit

        Reply
  • July 25, 2014 at 11:45 AM
    Permalink

    Dear Sir
    I am a salaried employee. I am presently staying in a rented house in Kolkata. In FY14-15, I booked a flat (by taking Home Loan) from Ideal Properties, the construction of which will complete by Dec 17. I am expected to get the possession in Jan 18.
    My query is – Can I claim both HRA & Interest on Home loan from FY14-15 or do I need to wait till FY17-18 for claiming Interest on Home Loan?

    Reply
    • July 25, 2014 at 2:19 PM
      Permalink

      Hi Rishi,

      No benefits with regards to principal repayment & interest payments will be allowed until construction is completed. You can continue to take HRA exemption benefits.

      Reply
  • July 27, 2014 at 2:47 PM
    Permalink

    Hi Sir

    I have taken a house. Though I get offer of possession in Jan 2013, I voluntarily took possession in April 2014. Though I have made all payment to builder in Feb 2013 ( payments which were entitled at time of possession ). The formal handover document from builder in in April 2014.

    Can I clam income tax benefit in financial year 2013-14.

    Reply
        • July 27, 2014 at 11:27 PM
          Permalink

          You are most welcome.

          Reply
  • July 28, 2014 at 12:48 PM
    Permalink

    Hi Soubhagya,
    Thank you so much for such a nice article and the way you answered multiple queries.

    My query is, I purchased the flat in Pune which is under construction and I am staying in rented house in the same city.
    Now my interest on housing loan is far greater than the rent I pay for my rented house. Now if I don’t claim HRA and instead claim tax benefit on home loan interest stating that I got my property possession and staying at my own flat (even though I actually didn’t get the possession and still staying in rented house). Is that possible just to maximize my tax benefit which greater on home loan interest than HRA?

    Reply
    • July 28, 2014 at 1:28 PM
      Permalink

      Hi Chandrashekhar,

      You can claim interest deduction benefits on borrowed capital once the house is ready to occupied. Out of the information provide, I could find that the said property is under construction, thus you can not claim any benefits/deduction until construction is done. Till then take HRA exemptions against rent payments.

      Reply
      • July 28, 2014 at 2:31 PM
        Permalink

        Thank You so much for responding quickly!
        My interest on home loan will be 3,50,000 during next financial year. And interest bracket for FY2014-15 is only 2,00,000. Can I still claim my past interest paid using 1/5th per year rule besides 2,00,000 bracket? Because this bracket will be already full filled by current interest paid.

        Thanks again!

        Reply
        • July 28, 2014 at 4:32 PM
          Permalink

          Hi Chandrashekhar,

          Your understanding is correct. If the house property is going to be self-occupied during FY 2014-15 then you can claim deduction upto Rs. 2,00,000 even if current year interest itself is more than this limit. While calculating total interest, you need to take current interest including per-construction interest (1/5th), but qualified limit will be only Rs. 2,00,000 for self-occupied house property.

          Reply
  • July 28, 2014 at 2:09 PM
    Permalink

    I have purchased a house in Sep’ 2013, and moved. I paid Home loan interest form Oct-Mar-2014 as 1,20,000/- ( 6 months). I also stayed in rented house and I paid rent 60,000 for 6 months (mar-2013-Aug-2013). Can I claim both HRA (6 months), Home loan Interests (next 6 months) in my IT return. My Employer deduct only Home loan interest for 6 months only and said either HRA or HLI any one will be possible

    Reply
    • July 28, 2014 at 4:41 PM
      Permalink

      Hi Uma,

      Employer is wrong! You can take 6 months advantages for the rents paid by way of HRA exemption and Home Loan interest deduction under self-occupied house property. Consider the adjustments while filing returns and take refund if any.

      Reply
  • July 28, 2014 at 7:39 PM
    Permalink

    Hi, I have purchased a flat in Bangalore WITHOUT any bank loan.
    But I stay in rented house since my own house is far from my office.

    1. Can I claim HRA in this case?
    2. Any bad consequences as IT dept might think that this is a tax evading trick?
    3. I am wondering if there is any possibility that IT dept will know I own a flat?
    Since I have not taken any loan, I assume govt will not know I own a flat.

    Please answer.

    Reply
  • July 28, 2014 at 8:53 PM
    Permalink

    Hi, I have purchased a flat in Bangalore WITHOUT any loan.
    But I stay in rented house since my own house is far from my office.

    1. Can I claim HRA in this case?
    2. Any bad consequences as IT dept might think that this is a tax evading trick?
    3. I am wondering if there is any possibility that IT dept will know I own a flat?
    Since I have not taken any loan, I assume govt will not know I own a flat.

    Please answer.

    Reply
    • July 29, 2014 at 9:40 PM
      Permalink

      Hi Sujeet,

      1. If your employer allows, then you may
      2. Yes! there are few cases where AO has asked for clarifications
      3. Govt/IT knows everything. Don’t worry 🙂

      Reply
  • July 29, 2014 at 4:09 PM
    Permalink

    Hi
    My wife and I stay with my son in Mumbai in his own flat (jointly owned by son and dughter-in-law and also both are co-borrowers of housing loan) as my workplace is nearby. Can I consider the rent for one room occupied by us and claim exemptions for the same?Also, can my son and dughter-in-law show it as income from property and get st-offs for house tax etc. Is it necessary to split the income or can it be accounted only in my son’s IT returns?

    Reply
    • July 29, 2014 at 10:44 PM
      Permalink

      Hi Mathew,

      Yes! It can be done, but you need to ensure proper rent agreement exists between you and your son, also your son files returns for such rental income.

      Reply
  • July 29, 2014 at 7:46 PM
    Permalink

    I own two 1 BHK flats in Mumbai 1 KM apart of each other. House 1 is solely owned by myself which is rented from May 2013 to March 2014. It has loan of about Rs.6 Lakhs and annual interest of Rs. 25000/-. House 2 jointly owned with my wife (50% each) which is rented from August 2013 to March 2014. It has loan of about 33 Lakhs and interest of Rs.360360/-. As there are 7 people in my family (including a Kidney disease patient), I took a 2 BHK flat in the same building as House 1 on rent from April 2013 to March 2014, annual rent paid Rs. 3 Lakhs. As House 2 is 1 KM away from House 1 it is not feasible to use both the flats for accommodating the large family. Following are my queries.
    1) Can both of us claim rebate of Interest on housing loan and HRA exemption for the rent paid? The reason for taking apartment on rent is large family with critically ill patient and both houses can not be occupied due to distance. Is this reason sustainable? The rent was paid from joint Bank account. Can my wife and myself show half the amount of rent paid and claim HRA exemption for that amount individually? I read somewhere that only one of the husband/wife can claim HRA benefit.
    2) Other option is to show House 1 as self occupied (even though it was actually rented out). In that case the how to show rental income received from House 1? The House 2 can be shown as let out. Both of us will get interest rebate on it (being higher accrued interest). Somewhere I read that husband-wife can not be shown to be living in different flats, is that correct ? In that case my wife will not avail HRA exemption. Or else she may be shown as living in rented accommodation and will avail HRA exemption. Please guide.
    3) If we show both the houses as let out and since we were staying in rented flat, can either of us claim HRA exemption for the 50% rent shared ( from joint account) even though the Leave and Licence agreement for the 2 BHK flat was on my name only?
    4) If in case the very reason for taking another house on rent is not valid then we may have to waive off the HRA exemption and only take the interest rebate into consideration. please guide.
    Earlier I was not aware regarding tax implication of taking rented house even though we own house in the same city. Your detailed answers to readers queries has made me much more aware about it. Thanks for it all and thanks in advance for your valuable reply.

    Reply
    • July 29, 2014 at 11:29 PM
      Permalink

      Hi Gajanan,

      The simple rule says, if you have two house properties then any one of the properties can be shown as self-occupied and other one as deemed to be let-out, but in your case both the properties are let-out. So you have to declare rental income from these houses and apply for full deductions . With regards to HRA, I don’t think you can get the benefits of exemption because rented accommodation is in the same area where you have your own houses.

      Similar to your case, many go by showing such self owned two properties as let-out and still claim HRA exemption benefits, but I don’t see it is right.

      Reply
  • August 4, 2014 at 12:27 PM
    Permalink

    I have bought a property in Mumbai along with my inlaws ( first owner is my mother-in-law). My mother-in-law had sold a property in Pune and invested in this property in Mumbai. Can i pay then rent for a property partly owned by me, as she has contributed around 50% of the total flat amount, and she is the first owner?

    Reply
    • August 4, 2014 at 4:08 PM
      Permalink

      Hi Parth,

      Seems not a good idea.

      Reply
  • August 20, 2014 at 12:24 PM
    Permalink

    Hi,
    I have one question. Suppose i have allotted an authority flat. I have not taken any home loan for the Flat Amount. But I am paying the installments to authority with the interest (House Price+Interest).
    (”Because Yamuna Authority are so clever/hungry for money. They always ready for bribe rather than giving any easy solution. They say for sending letter at home, but the letter do not come till the date over. And they only mislead the people saying first make approve the home loan from bank then come for letter.”)
    My question is that what is procedure to claim the tax deduction under which section, If i am paying the interest of the Home from Salary.

    Please help us!
    Thanks!

    Reply
    • August 20, 2014 at 12:39 PM
      Permalink

      Can i claim full HRA in that case ?
      Because i am owning a flat with paying interest WITHOUT Home Loan .
      Flat will be ready in 4 years.
      I staying at rented home, my flat is very far in different city.

      Tell me so that i can save some tax on my Salary.

      Thanks! 🙂

      Reply
      • September 7, 2014 at 7:15 PM
        Permalink

        Flat is still not ready! Yes, you can continue to claim HRA exemption benefits.

        Btw, sorry for delay in response. 🙂

        Reply
    • September 7, 2014 at 7:12 PM
      Permalink

      Hi Neelesh,

      I don’t think that’s a right way they are opting. Not seeing any borrower and lender relationship on home loan exist. If you have a proper letter/certificate stating that the repayments are happening towards borrowed capital then yes, interest and principal repayments can be claimed under their respective sections.

      Reply
      • September 25, 2014 at 4:39 PM
        Permalink

        Dear Sir,

        Thanks for given information in above post that has clear my lots of doubts but i still have a little query pending that is if i have an “Allotment-cum-Allocation letter” from authority mentioning all the Payment Schedule with Principal and interest details as per EMIs can we show it as a proof or i need to show some other document then what it will be? and what benefits i can get during tax deduction.

        Please reply soon..

        Thanks in advance!

        Reply
        • September 27, 2014 at 10:14 AM
          Permalink

          Hi Mohan,

          You also need to have possession certificate to start claiming deductions. You can either claim as self-occupied or let-out depending upon how you are utilising the said house property.

          Reply
  • August 23, 2014 at 3:44 PM
    Permalink

    i am the owner of a single flat.
    can i show it as self occupied and claim the interest on home loan(rs.140000) even if my flat in the same city where i do govt service is vacant?
    is it neccessary to show notional rent even if the flat is vacant?

    Reply
    • August 25, 2014 at 9:41 PM
      Permalink

      Hi Durga,

      You can show it as self-occupied.

      Reply
  • September 2, 2014 at 8:08 PM
    Permalink

    Sir, I bought a house in 2010 (jointly with my father (retired having pension and interest income of Rs 2 lakhs p.a ). Initial amount for the house was paid by me and also a loan was taken and being paid by me. I got married in 2013 November and moved over to my husbands rented house. I started paying the rent since my husbands income is not comfortable. My parents are staying in my house. Now my Question: Can I claim deduction of Rs 150000/- for the house where my parents are staying and also claim rent payment deduction against HRA. The distance between these two houses are 5 kms only. Please clarify.

    Reply
    • September 7, 2014 at 6:27 PM
      Permalink

      Hi Geetha,

      Have read a case where wife is supposed to stay with husband after marriage and in that case any rent payment by wife towards currently staying accommodation (with husband) will be allowed for claiming HRA exemption benefits and any interest paid towards own house can be claimed (even though not staying) upto Rs. 1,50,000. Now the limit has been increased to Rs. 2,00,000 u/s 24b.

      Seems you are also allowed in your case.

      Reply
      • September 10, 2014 at 1:46 PM
        Permalink

        Sir, my Auditor says show some notional rent receipts for the house where my parents are staying. It will enable me to claim entire interest paid against rental income. He also says – by this any possible dispute can be avoided. What is your opinion sir?

        Reply
      • September 11, 2014 at 1:55 PM
        Permalink

        Sir,

        In your reply you have stated “Seems you are also allowed in your case.” What is the meaning of this ?

        Reply
        • September 11, 2014 at 5:16 PM
          Permalink

          Hi Geetha,

          Your auditor needs some refresher course! He/She should know if a house property is shown as self-occupied then annual value of the property will be NIL. No rental income (even notional) is applicable.

          Why I used the word ” SEEMS”! Until there is something specifically written in the rule book I can’t confirm my view point. So I have to use “may be”, can be” seems” etc. My point is based on certain cases in past where AO has approved assessee such claims/deduction under similar situations. Eventually AO has to clear this after looking at the genuinity of the case.

          Reply
  • September 9, 2014 at 5:33 PM
    Permalink

    Hello Mr.Patra, Thanks for the Very insightful article. I am living in my own house and my parents live in the same city in a rented house for which I am paying the rent as they do not have any income sources.
    Can I claim both tax benefits for payment of Interest and principal repayment against the home loan for the house I am living in and also HRA for paying rent for my parents house. Please advice.
    Thanks. Gayathri

    Reply
    • September 9, 2014 at 8:20 PM
      Permalink

      Hi Gayathri,

      You can only claim deduction for the interest paid towards borrowed capital as self-occupied house property. Taking advantages on HRA benefits towards rent payments will not be a good idea.

      Reply
  • September 12, 2014 at 6:06 PM
    Permalink

    I have two homes loans and in same city I am staying in my in-laws house. So I have rented out both the properties. So in that case, can I show that I have rented out both properties and paying HRA to my in laws. And also take benefit of tax exemption for both homes ( loan interest – rent out income) per home. and apply for HRA separately. So in that case, I have shown both homes loans, both are rented out and I am staying at others house so paying HRA. Or can I just take benefit of tax exemption for two loans and how?

    Reply
    • September 14, 2014 at 10:45 PM
      Permalink

      Hi Jain,

      You can get interest deduction for these houses, but no HRA exemption benefits will be allowed.

      Reply
  • September 13, 2014 at 5:23 PM
    Permalink

    Sir, I am confused. Refer following answer. This contradicts your earlier view on my question – whether HRA can be claimed for paying rent for my living house and Rs 150000/- for my house where my parents are living. Your answer was Yes claimable for both. Now:

    “Hi Gayathri, You can only claim deduction for the interest paid towards borrowed capital as self-occupied house property. Taking advantages on HRA benefits towards rent payments will not be a good idea”.

    Sorry I am troubling you a lot.

    Reply
    • September 13, 2014 at 5:32 PM
      Permalink

      Hi Geetha,

      Sorry! if my response was confusing 🙂 What I tried to convey is, you can claim interest deductions for the self-occupied house property, but no HRA exemption benefits will be allowed if rent payments are happening for your parents stay.

      People do claim both (HRA & Interest) in such cases, but that’s not right!

      Reply
    • September 13, 2014 at 5:42 PM
      Permalink

      I went through your earlier queries. You started with asking, “presently you are paying rent for the house where you and your husband stay (because of husband’s low income)” and your parents are staying in your own house you bought before marriage”. My reply was YES for both HRA and Loan interest.

      Now you are confusing me saying, “I am living in my own house and my parents live in the same city in a rented house for which I am paying the rent as they do not have any income sources.”.

      I replied to Geetha & Gayathri respectively as per their questions.

      Tell me what exactly is your final question!

      Reply
  • September 24, 2014 at 2:54 PM
    Permalink

    Hi Soubhagya,

    I work in mumbai and stay at a relative’s place, who doesnt take any rent from me. Can I pay rent to my parents in Goa and claim it under HRA? As during every weekend I am in Goa.

    Reply
    • September 25, 2014 at 5:56 PM
      Permalink

      Hi Amey,

      It won’t be allowed.

      Reply
      • October 16, 2014 at 11:38 AM
        Permalink

        Sir, very sorry. You have used “might” and also said “I am not the one who will approve this”. Again I am confused.

        Anyway I have decided to claim HRA deduction for rent paid and not to claim Interest paid on loan for my property where my father stays.

        Thanks I disturbed you a lot.

        Reply
  • September 24, 2014 at 4:07 PM
    Permalink

    Sir, Very sorry. I think the main question is not answered correctly. My earliest posting is re produced below: Kindly answer me Sir. I have not yet filed my return.

    “Geetha S September 2, 2014
    Sir, I bought a house in 2010 (jointly with my father retired having pension and interest income of Rs 2 lakhs p.a ). Initial amount for the house was paid by me and also a loan was taken and being paid by me. I got married in 2013 November and moved over to my husbands rented house. I started paying the rent since my husbands income is not comfortable. My parents are staying in my house. Now my Question: Can I claim deduction of Rs 150000/- for the house where my parents are staying and also claim rent payment deduction against HRA. The distance between these two houses are 5 kms only. Please clarify.”

    Reply
    • September 30, 2014 at 1:45 PM
      Permalink

      Sir waiting for your answer . Pl advice. Have to file my return

      Reply
      • October 1, 2014 at 8:37 PM
        Permalink

        Hi Geetha,

        As suggested in the very first response; you might claim HRA and loan interest deduction benefits, but please remember! I am not the one who will approve this.

        Reply
        • October 16, 2014 at 11:40 AM
          Permalink

          Sir, very sorry. You have used “might” and also said “I am not the one who will approve this”. Again I am confused.

          Anyway I have decided to claim HRA deduction for rent paid and not to claim Interest paid on loan for my property where my father stays.

          Thanks I disturbed you a lot.

          Reply
          • October 16, 2014 at 6:40 PM
            Permalink

            Hi Geetha,

            If I were in your situation, I would have gone ahead to claim HRA exemption benefits and Interest deductions. This much I can say 🙂

          • October 17, 2014 at 2:44 PM
            Permalink

            Sir, in the past one month or so I studied and learnt a lot on house property taxation. I am reproducing below, my original question. Pl read it carefully, forget answers given by you earlier and answer afresh. I think you will agree with my contention to claim HRA and not interest.
            “Geetha S September 2, 2014
            Sir, I bought a house in 2010 (jointly with my father (retired having pension and interest income of Rs 2 lakhs p.a ). Initial amount for the house was paid by me and also a loan was taken and being paid by me. I got married in 2013 November and moved over to my husbands rented house. I started paying the rent since my husbands income is not comfortable. My parents are staying in my house. Now my Question: Can I claim deduction of Rs 150000/- for the house where my parents are staying and also claim rent payment deduction against HRA. The distance between these two houses are 5 kms only. Please clarify.”

            Thanks

          • October 17, 2014 at 3:05 PM
            Permalink

            Sorry Sir. Your answer is correct. It struck me just now. Since I was living in my own house up to September 2013, I am eligible for owner occupation /interest claim. Also since I started paying rent from October 2013 for another house I am eligible for HRA deduction. Sorry I disturbed you a lot. But learnt a lot.
            Sir, Next year (ie) 2014-15 year I will not be able to claim interest. Am I correct Sir? With thanks

          • October 17, 2014 at 7:25 PM
            Permalink

            Hi Geetha,

            You didn’t disturb at all. This blog is meant for clarifying doubts 🙂

            Regarding next year. Same logic will apply as per very first response of mine i.e. you can claim both HRA and Interest deductions.

  • October 16, 2014 at 7:13 PM
    Permalink

    Hello ,

    Suppose I have purchased a residential property having already constructed old house (around 20 years old) where I can not stay as that is not in good condition (its asbestos sheet house ) .

    So I am planning to let it out and continue to reside at my rented house which is in almost same distance from my own house to workplace (but different locality). And also I am willing to stay in rented house because that is easy to take care of my kid as we are working couple and have close relatives near by my rented house.

    In the above case can I claim both HRA and interest paid on borrowed capital under Income from House property.

    I wanted to know about what are the documents that I need to submit as a proof for Income from House property?

    Please clarify.

    Thanks and regards,
    Arun

    Reply
    • October 16, 2014 at 7:56 PM
      Permalink

      Hi Arun,

      You have indicated that the purchased house isn’t in a good condition then how you are going to let-out it? Having said this, since you already own a house then such logic of not staying in that and claiming HRA exemption benefits might not be allowed.

      Not staying in your own house will simply be treated as your choice only. You can only claim 80C and 24b for principal repayment and interest deduction respectively as self-occupied house. If the house property is already let-out then you have to pay tax on the net rental income after deduction of full interest or no tax if loss, but no HRA exemption benefits will be allowed.

      Reply
  • October 18, 2014 at 10:15 PM
    Permalink

    Dear Sir, Thanks a lot. However with the little knowledge I have now, I will not claim interest next year since I neither live in my own house nor I have moved away on account of my employment. Geetha S

    Reply
  • October 22, 2014 at 2:54 PM
    Permalink

    I m staying on rent in Delhi, working in noida (UP) and having owned property (used by family) in Ghaziabad (UP). Can i claim deduction of both HRA and Interest on self occupied property. Distance to office in noida from Delhi or Ghaziabad is same.

    Reply
    • October 28, 2014 at 8:18 PM
      Permalink

      Hi Ashish,

      Yes! you can claim both, Simply they can be considered as two cities.

      Reply
  • October 29, 2014 at 3:28 PM
    Permalink

    Hi,
    I just wanted to know can I claim HRA and the benefits of Interest payable of home loan in following circumstances

    1. I am living with my Parents in Delhi and also claiming HRA by showing Monthly payment of rent through cheque. They are also showing the rent amount in their ITR.

    2. I am working in Noida
    3. I have booked Property (about to get possession) in Noida and also availing Home loan on this property.
    4. The distance from my workplace and the booked property is 35 KM.
    5. I would not be in a position to move in Noida property (after possession) as my wife office is just 10 KM from Delhi home.

    Please suggest, under above situation can I claim both HRA and benefits of Interest payable of home loan?

    Thanks.

    Reply
    • November 24, 2014 at 8:40 PM
      Permalink

      Hi Vicky,

      This looks good! I don’t think there will be any issues. You can claim both HRA & Interest deduction benefits.

      Reply
  • November 12, 2014 at 9:45 PM
    Permalink

    Hi Soubhagya,
    Below here is a situation I am currently in:
    Property-A: Rented by myself where I, wife and child stay.
    Property-B: Jointly owned by Parents, Spouse and myself. Here my parents stay in a portion of the flat and larger portion is rented out.
    Property-C: Jointly owned by myself and mother is rented out. I have a loan on this flat which at distance from school and office from where I currently stay (Property-A).
    Property-D (different city): Jointly owned by myself and wife in rented out.
    Question:
    1. Can I claim HRA deduction?
    2. Am I entitled to claim tax benefits (Principal and/or Interest) on the loaned flat? If yes what portion of it?
    Please suggest to optimize tax benefits and thanks for your expert advice.

    Reply
    • November 13, 2014 at 10:56 PM
      Permalink

      Hi Vicky,

      You can not claim HRA exemption benefits, Since all the houses are rented out, you need to pay tax as per the respective ownership, but yes! portion of house House B, can be treated as self-occupied but not full.

      Reply
  • November 24, 2014 at 12:07 PM
    Permalink

    Hi Soubhagya,

    There are 2 different post with same name – Vicky

    1st – posted on 29-oct (which is mine)
    2nd – posted on 12-Nov

    I think, you have responded (13-Nov) on the query, posted on 12-Nov.

    That would we really nice, if you also share your expertise on my query (dated 29-Oct).
    Thanks.

    Reply
    • November 24, 2014 at 8:41 PM
      Permalink

      Done! Had missed that 🙂

      Reply
    • November 25, 2014 at 10:27 PM
      Permalink

      You are welcome!

      Reply
  • December 2, 2014 at 12:08 PM
    Permalink

    Dear Sir,

    I am claiming the Interest on Home Loan & Paying Tax on HRA received since past 3 years, but now the interest amount is less & Tax on HRA is Higher, so let me know that can I switch the option before expiry of 5 years.

    Reply
    • December 4, 2014 at 9:01 AM
      Permalink

      Hi Suneel,

      Difficult to answer! You should not do it just for the sake of tax saving else it would be treated as tax evasion. Unless you have a genuine reason to shift into a rented accommodation, I don’t think this will be a good idea.

      Reply
  • December 4, 2014 at 4:17 PM
    Permalink

    Hi,

    My Question is about Pre- EMI. I know that Pre-Emis can be claimed for tax exemption in 5 years after possession of the property. Now suppose interest paid in current FY is Rs. 2L and 1/5th of the Pre-EMIs paid in years when the property was under construction is 35000/-. Can I claim Rs.2.35L. I guess answer is NO.
    Now if i have 5 years and in initial years my interest is more can I claim my Pre-Emis in later years. For example instead if claiming pre emis in 1-3 rd year post possession can i only claim it in 4th and 5th year.

    Reply
    • December 5, 2014 at 12:06 AM
      Permalink

      Hi Nivedita,

      Answer to your first question is, “No” i.e. your guess is correct!

      Wrt, second question; No! it won’t work in favour of you as you are only given the option to use current plus 1/5th of pre-construction interest for first five years only. During 4th or 5th year it can’t be increased if tax rules remain same as per FY 2014-15

      P.S. I assume, we are talking about self-Occupied house property!

      Reply
  • December 6, 2014 at 9:48 AM
    Permalink

    Hi,

    Let us say I am working in Nagpur. Can I claim HRA Exemption for rent paid to parents and house is let us say 800-900 kms away from Nagpur but in the same state?

    Reply
    • December 15, 2014 at 8:27 AM
      Permalink

      Hi Santosh,

      No! it doesn’t look logical.

      Reply
  • December 7, 2014 at 10:44 AM
    Permalink

    Dear Sir,
    I am working in central government organization. My father is 63 year old and he is depending on me. At present there is no income earned by him. I want to know whether I can borrow money of around 2 lakhs from my father for purchasing a house and claim tax benefit for the interest of around Rs 40000/-per year paid to him. I am coming under 20% tax bracket. If I could claim this iterest I can save tax of Rs 8000/. Please advise.
    Thanks and regards
    Raveendran K

    Reply
    • December 13, 2014 at 9:00 AM
      Permalink

      Hi Raveendran,

      It is possible if;
      1. Your father issues certificate for the amount received towards such borrowed capital for principal repayment and interest paid.
      2. He also shows this interest in his IT returns as Income.

      Reply
  • December 13, 2014 at 5:16 PM
    Permalink

    hi,
    I have purchased a flat near Nagpur and paying EMI since lasty 1year. i already got the possession of flat.
    But i got transferred from Nagpur to Indore and now staying on rent in Indore.

    Now my flat near nagpur is vaccant / not on rent.

    As per my company if i have to claim for both H/L & HRA i have to fill form 12C.

    Pl advice how to fill form 12C? especially following columns

    Resdential status:
    Income from house property:
    and which address to put in form current one or address on which i m paying H/L.

    1more thing.
    I have taken 1loan h/l from SBI & secondary/supplimentry loan from my company employee society under house modification /extra work to do over and above my sale deed amount while it was under construction.
    I have certificates from both firms. can i combine & claim both loans Int & principal paid. & HRA also.

    Reply
    • December 14, 2014 at 6:09 PM
      Permalink

      Hi Nilesh,

      To calculate loss from house property, obviously you need to put the address of vacant property. You can consider the said house property self-occupied for full financial year even though for few months you have to stay in a rented accommodation. In such case you can claim both HRA exemption & deduction of interest along with 80C claim of principal repayments.

      Whatever loan you have taken for construction of house property, you will be eligible to get deduction claims subject to you have proper repayment certificates from each lenders.

      Reply
  • December 15, 2014 at 5:01 PM
    Permalink

    Hi,

    I am currently staying with my parents in Mumbai (Mulund) and have purchased a flat in Badlapur (Thane) (I got the possession in Nov 2013)
    1) As I am still planning to stay with my parents, can I claim HRA tax benefit for April 2014 to March 2015?
    2) Can I also claim housing loan benefit which is 24(b) and 80c – considering that I work in a different location i.e. Mumbai and my own house is in Thane.

    Reply
    • December 16, 2014 at 10:47 PM
      Permalink

      Hi Reshma,

      The answer would be, you can claim deduction of loan interest and principal repayments as self-occupied house property, but not suppose to take advantage of HRA exemption benefits.

      Reply
  • December 30, 2014 at 1:40 PM
    Permalink

    Hi Kumar,

    I am staying in a rented house currently, but constructing the own house. Since the construction is not completed and EMI is being paid [only Interest not Principle at the moment], can I claim HRA and 80EE together?

    Regards,
    Sriram

    Reply
    • January 9, 2015 at 12:16 PM
      Permalink

      Hi Sriram,

      You can claim HRA only.

      Reply
  • January 5, 2015 at 12:31 PM
    Permalink

    Hello Soubhagya,

    Very nice article and replies.

    I am getting a bit confused and need clarity.

    We have one house in Mumbai which is co owned by me and my husband. This house is let out from March 2014. The rent is coming under my name as I am the first owner. We have Housing loan on this house. We are staying in a rented accomodation from March 2014.

    My husband also has another house in different state and which is used by his parents. We have housing loan on that property (House is in his name but housing loan is applied jointly).

    Uptill last year we were staying in our own house and then showing it as selfoccupied (50-50) in our income tax returns and showing husband’s house as deemed rental for income tax return in his return.

    However, as now we are staying in rented accomodation for this financial year, my husband is interested in claiming HRA for rented accomodation.

    Now my questions are :
    Can he show his house in other state as self occupied and claim HRA here in his inocme tax returns? I think the answer should be yes but his company’s system doesnot allow this. They can only show self occupied house in the city they are staying which is not right in my eyes.

    I will show the rental income plus claim full interest benfit of mumbai house and not take any HRA exemption in my income tax return. I think this is right way of treating this situation or you have better advice.

    Thanks to respond asap as we have tomorrow as last date for submitting proofs for investment in our respective companies.

    Thanks a lot in advance,
    Shilpa

    Reply
    • January 23, 2015 at 11:24 PM
      Permalink

      Hi Shilpa,

      If your husband for employment purpose staying in a rented house then he can claim HRA benefits, and the house where his parents stay that can be show as self-occupied. Employer has to somehow deal with it, else you need to show it while filing ITR. Wrt to other house (owned jointly) which is let-out, you both can show 50:50 rent income and adjust 50:50 interest deduction (hope loan is being served by both of you as well).

      Reply
  • January 7, 2015 at 11:46 PM
    Permalink

    Hi, I m doing job in Noida. I am living in Delhi on rent. I had purchased a under construction flat in Noida in 2010 and got the possession in May 2014. I had Rent out that flat. Can I claim HRA and Home loan benefit on let out property both?

    Reply
    • January 9, 2015 at 10:39 AM
      Permalink

      Hi Raj,

      Yes you can!

      Reply
  • January 8, 2015 at 5:38 PM
    Permalink

    Hello Soubhagya Kumar Patra,
    I have a home loan on a flat purchsed during the FY 2013-14. The possession was given in March 2014.
    But I have neither occupied nor let out the property till now. I am currently residing in a rented house.
    Both the property and the loan are on a joint account – myself and my wife.

    (1) I want to claim tax benefit u/sec 24 interest towards home loan.
    Since my contribution towards EMI is 100%, I want to claim 100% tax benefit u/sec24.
    (2) Also I a residing in a rented house. So I would like to claim the HRA as well.
    (3) For claiming sec 24 for home loan, is it a must that I have to show it as a let out property and add some rental income to my account?
    (4) Please let me know the possible options. I am staying in a rented house. I have not let out the own house.

    regards
    Madhav

    Reply
    • January 9, 2015 at 10:30 AM
      Permalink

      Hi Madhav,

      Except from any logical reason (like employment purpose) if you are keeping your own house vacant then you should show notional rent and pay tax after adjusting 100% of loan interest (yes you can take full benefits if you are making 100% repayment). You can also claim HRA benefits exemption in such scenario.

      Reply
      • January 9, 2015 at 2:16 PM
        Permalink

        Thanks Soubhagya.
        Can you elaborate a bit on “purpose of employment”. What does it mean? I have seen this line saying it can be shown as a reason for not residing in own house.

        Also can you through some details about notational rent? How can it be calculated?

        Reply
  • January 8, 2015 at 6:01 PM
    Permalink

    Hi Soubhagya,
    I am sorry I have not read all the queries raised earlier & the reply provided by you. My query is as below.
    I was staying in Pune & purchased flat in 2011. I have possession certificate /completion certificate etc with me. I am also regularly paying my property tax which is apprx 12,000pa. I moved to Bangalore mid 2013 due to Job change. I purchased flat in Bangalore during end of 2013 & registration completed in Feb2014. I occupied flat during last week of Apr 2014. The issue is I bought my Bangalore flat from Landowner’s share & not from Builder’s share. In such cases Builder will not issue any POSSESSION CERTIFICATE to me as I have not purchased directly from them. Apart from that I have all the documents like Sale Deed, Provisional certificate from Bank with breakups etc. Now I would like to claim interest portion of 2,00,000 paid towards interest under section 24 (loss towards self occupied property). My company HR says Possession letter or completion certificate is mandatory. Completion Certificate from BBMP (Bangalore Municipal Authority) is in progress as building work still going on & some flats are still unoccupied. What is the solution for this problem? I was reading on some other site that Self Declaration Form will also do if you don’t have above 2 certificates. Is that true? Kindly help me in this regard.

    Reply
    • January 9, 2015 at 10:22 AM
      Permalink

      Hi Guruprasad,

      Many a time employers stick to some points instead looking at the situation if the same is a logical one. In case your employer doesn’t accept to any such declarations (even self declaration) then you should put these while filing IT returns during July and take refunds if any.

      Reply
  • January 9, 2015 at 3:16 PM
    Permalink

    Hiii,
    I have one query. Please provide your view.
    Whether HRA Benefit & interest on Housing Loan can be claimed simultaneously for below category of employees working in organization where i am working (Gurgaon)
    1. Owned Property & rented Property both in Gurgaon .(Both Places in same city)
    1. Owned Property in Noida & Rented Property in Gurgaon (with in Delhi NCR)
    1. Owned property in Manesar & Rented property in Gurgaon (Not with in City , even not in Delhi NCR but at a place which is app. 30-40 k.m. away from working place.

    Kindly revert back to me considering request is made by Company Employees who is entrusted with Job of preparation of Computation Chart of Salaried person in order to provide maximum benefit to employees & Company simultaneously.

    Thanks & regards,
    Neha Garg

    Reply
    • January 9, 2015 at 5:25 PM
      Permalink

      Hi Neha,

      Find answers in sequence to your queries;
      1. No! In such case, employee supposed to stay in his/her own house, not in rented accommodation. If so, then employer should not allow employee to take HRA exemption benefits. Let employee declare the situation while filing his/her IT returns and take refund if any.
      2. Yes!
      3. I am not familiar with Manesar, but I would suggest from an employer point of view, it should be two different city in first place. 30-40km is really a good distance by the way. Can be considered in favor of employee.

      Reply
  • January 20, 2015 at 3:04 PM
    Permalink

    Hi,

    I have a house in Noida and I have recently purchased a house in Bangalore. For tax saving purposes, Can I show Bangalore property as let out and Noida property as self occupied?

    I know it sounds a bit silly but I remember reading somewhere that we can choose between the two.

    I stay in Bangalore in newly purschased property though

    Reply
    • January 28, 2015 at 11:59 PM
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      Hi Vishal,

      It’s not silly, but a right question 🙂 Yes! You can do so. Hope your Noida property is a vacant one or you are not actually generating any income from that house.

      Reply
  • January 21, 2015 at 12:02 PM
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    Please clarify if one can claim home loan and HRA benefits by husband (working) and rental income in wife name(Non-Working).

    We are jointly owning a flat and availed home loan in my name and wife is a co-applicant.

    Reply
    • January 22, 2015 at 11:40 PM
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      Hi Srinivas,

      In case of joint ownership of house property and co-holders in home loan, both deduction and income have to be distributed. One can not take deduction of loan interest & principal repayments and other only show income. This may treat as tax evasion.

      Reply
  • February 3, 2015 at 5:08 PM
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    Hi Mr. Patra,

    I have purchased my own flat and paying EMI on it..interest paid is 6.5 lakhs and principal approx 95000/- My own house is 14 km from office and rented accomodation is 3 km from my office in the same city. Can i claim HRA deductions & total interests paid on my EMI.

    if yes, what documents would be need?

    Regards,

    Vaib

    Reply
    • February 3, 2015 at 9:36 PM
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      Hi Vaib,

      If your employer allows it, then you can claim both. For this you need to submit rent payment receipts to your employer along with PAN of landlord (if monthly rent payment is more than Rs. 8,333) and home loan interest paid certificate for the year.

      Alternatively while filing IT returns you can fill up required details in ITR form and file to claim both HRA & Loan Interests.

      P.S. As a rule, you own house should be in a different city in such scenario, but many a time it has been allowed as per your case. So I can’t confirmly say “Yes” as an answer to your question 🙂

      Reply
  • February 9, 2015 at 6:09 PM
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    Purchase flat in home town which is occupied by my family. I resides in a rented house. I am going to claim both HRA and benefits on Home Loans. here do i need to provide some kind of proof that my flat is occupied by my family. please help.

    Reply
    • February 12, 2015 at 9:58 AM
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      Hi Sreelatha,

      Only declaration is enough to claim Self-Occupied house property which is being used by family and rent payment receipts, landlord details (and PAN if applicable) is enough.

      Reply
  • February 12, 2015 at 9:32 PM
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    I am working in delhi and owing 2 properties (janta flats) ie .one room ,kitchen set since sepember 2014 within 12kms radius from my office by taking home loan on each flats . I have given 1 property on rent @4000/-pm, and another one is still vacant but I am staying with my mother in another house owned by my mother and paying rent to her, due to more spacious and better facilities.
    In this scenario, can I get tax benefit on HRA and also house loan on 2 houses; as one property is let out and another is vacant.?

    Reply
  • February 12, 2015 at 9:35 PM
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    hello,
    I am working in Delhi and owing 2 properties (janta flats) ie .one room ,kitchen set since September 2014 within 12 kms radius from my office by taking home loan on each flats . I have given 1 property on rent @4000/-pm, and another one is still vacant but I am staying with my mother in another house owned by my mother and paying rent to her, due to more spacious and better facilities.
    In this scenario, can I get tax benefit on HRA and also house loan on 2 houses; as one property is let out and another is vacant.?

    Reply
    • February 13, 2015 at 12:31 AM
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      Hi Sanju,

      You may get HRA exemption benefits, but you need to show both houses as let-out and pay tax on the same.

      Reply
  • February 25, 2015 at 6:01 PM
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    Dear,
    Hi,
    Me and my wife are both working in central govt same office and has both availed loans as co applicants for two houses. one is completed and the other is under construction.
    we both come in 30% slab. plz do suggest, can we avail loan benefits on both houses or do we need to show different loans. how can we maximise the benefits of tax rebate.
    regards

    Reply
    • March 1, 2015 at 9:20 PM
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      Hi Milind,

      You can claim deduction on repayment of loan for the house which is completed. Since both are at equal tax slab then you can share deduction claims equally.

      Reply
  • May 21, 2015 at 1:36 PM
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    I am working in Delhi and live in rented accomodation. My wife and my child is living in Tamilnadu. Can I claim HRA for where my wife and child lives, If i dont want to claim HRA in Delhi. or can i claim HRA for both (in delhi as well as in tamilnadu).

    Regards
    Prabhu

    Reply
  • May 26, 2015 at 3:46 PM
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    Hi,
    I am staying in hyderabad,
    Am claiming only Home Loan but am paying rent for my parents stays in Nalgonda which is 15oKM from hyderabad.
    Am i eligible for claim HRA as well ?

    Reply
  • May 26, 2015 at 4:29 PM
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    Hi,
    I stays in hyderabad,am claiming only Home Loan,my wife she is working in different place which is in the same city and also longer distance from my office.
    If i took the rented house near to her working place which is middle between my office and her office.

    my office to own house is about 12KM
    my office to rented house(If i took the rented house) is about 2o KM

    am i eligible for claiming HRA as well(If my parents will stays in my own house) ?

    Reply
    • June 12, 2015 at 2:20 PM
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      Hi Jankiram,

      In such case, your employer should allow you. But in prima-facie such arrangement will not entitle to claim both.

      Reply
  • June 16, 2015 at 1:04 PM
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    Dear Mr. Soubhagaya

    Pls revert on my query sent to you on yesterday .

    thanks to advise urgently.

    b/regards

    Dheeraj jain

    Reply
    • June 16, 2015 at 7:46 PM
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      Hi Dheeraj,

      I could not find your question. Can you please post it again? I will revert.

      Reply
      • June 17, 2015 at 12:03 PM
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        Dear Mr. Soubhagya ,
        Good Day !
        My query is that i own a house in my city which was a bank home loan case . I have foreclosed the loan by making part payment for INR 53000/- (aprox) to bank in the month of May ‘2015 . As i had planned to foreclose the home loan and get my house reconstructed from scratch after demolishing the building i have moved to a rented place same city since April’2015 onwards where i am paying rent of INR 7000 /- p.m. . Kindly advise ( 1) can i avail tax rebate on both H.L. (PRINCIPAL & INTEREST) paid in current financial year alongwith HRA benefit as it may take almost 1- 2 years to reconstruct the house. (2) Also if yes , any time limit for me to avail this joint tax rebate beneifit of H.L & HRA and any documentary supporting required to submit to my employer as i am working for a private corporate house along with my tax declration for current financial year.
        thanks & b/regards
        dheeraj jain

        Reply
        • June 17, 2015 at 6:37 PM
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          Hi Dheeraj,

          Before demolishing the house property what ever repayment you have done (I hope it was use as Self-Occupancy), you can take benefits of deduction on principal & interest payments from the beginning of the FY 2015-16. Now you do not have any house property to occupy, thus you can claim HRA exemption benefits, but not anything towards loan repayments as the house is under construction stage.

          Reply
  • August 16, 2015 at 11:17 PM
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    Hi Soubhagya,
    What is the situation ,If I have 2 such properties like in point 3(both are in different city to the one I residing). Will both comes under self occupied since they are in different city and I can claim HRA or one comes under self ocupied and other comes under deemed to be let-out and I can claim HRA benefits

    Reply
    • August 18, 2015 at 11:10 PM
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      Hi Badri,

      Both can not be shown as self-occupied. In this case you will be allowed to treat only one of the properties as Self Occupied and other one (or all others are) considered to be Deemed to be Let Out. Your income for this house property will be calculated as if it has been let out. Of course, you can continue to claim HRA exemption benefits.

      Reply
  • August 19, 2015 at 10:35 AM
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    Thanks Soubhagya, Did not got this clear answer from other sites I checked..

    Reply
    • August 19, 2015 at 11:58 PM
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      You are most welcome Badri!

      Reply
  • May 30, 2017 at 3:37 PM
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    HI,

    Just some days back, I got offer of possession for my flat in Noida. But I am staying in Ghaziabad due to some personnel reason.

    Loan is taken on name of both of us(me and my husband) but the property is on my name.
    Can I avail HRA and interest EMI paying on flat ?

    Reply
    • June 3, 2017 at 8:58 PM
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      Hi Savita,

      Yes! You can

      Reply
  • June 10, 2017 at 1:22 PM
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    Hi Soubhagya ,
    My situation is confusing please help me clarify that. I have purchased flat in oct 2015 and got the possession on 27th march 2017. I was staying on rent and have paid rent for whole year.
    In form 16 company included HRA for year since by that time possession was not confirmed.

    Now, please confirm if I can claim both HRA (already included in form 16) and home loan interest\principal both thru filing ITR (since possession received 27th march’17). Also, whether i need to submit any supporting document like possession certificate & home loan certificate ?
    if yes, please confirm to whom and when i need to submit those.

    Thanking you in advance !

    Reply
    • June 11, 2017 at 4:47 PM
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      Hi Tirthankar,

      In your case, having possession certificate for the FY 2016-17 would be enough to get both benefits of HRA & Home Loan repayment benefits.

      Reply
  • June 19, 2017 at 8:24 PM
    Permalink

    Hi
    I stay in Mumbai with my parents who own the property and I pay them rent. I have also one property in pune and I am paying EMI for the same can I claim HRA and EMI both.

    Reply
    • June 20, 2017 at 7:33 AM
      Permalink

      Hi Varsha,

      Yes, you can.

      Reply

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