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Can we claim HRA deduction u/s 10(13A) and Interest on housing loan u/s 24(b) simultaneously if both are in the same city?

Shudhanshu Agrawal 
Updated on 27 July 2020

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Update:

As announced in budget 2020, taxpayers who wish to opt for the New Income Tax Regime from AY 2021-2022 can not claim the exemption of House Rent Allowance.   

Can we claim HRA deduction u/s 10(13A) and Interest on housing loan u/s 24(b) simultaneously if both are in the same city?

 

Solution:

 

First, we should refer to the related provisions under the Income Tax Act, 1961. All relevant sections are mentioned below:

 

Section 10(13A) requires 2 conditions for claiming HRA exemptions:

 

1.      The residential accommodation occupied by the assessee should not be owned by himself; and

2.      The assessee has actually incurred expenditure on payment of rent in respect of the Residential accommodation occupied by him.

 

Annual Value of Self Occupied Property as per Section 23(2):

 

  1. property is in the occupation of the owner for the purpose of his own residence; or
  2. cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house or part of the house shall be taken to be NIL.

 

Deduction for interest as per Section 24(b):

 

  1. where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital

 

 

 

 

After going through the above section it is clear that both the deductions can be taken simultaneously if all the conditions mentioned in above sections are fulfilled. Moreover, there is no provision which is prohibiting the deduction and exemption. The Delhi High Court in the case of CIT v. Mr. Justice Avadh Behari Rohtagi [1986] 157 ITR 441 held that the word used is “any other place” so if any person has taken any house on the rent and at the same time he is also having the house property in the same city deduction in both should be allowed as there is no provision which is prohibiting the same.

 

 So we can conclude that if a person has a house property and he is also paying the rent for any house property in the same city but at different place then he will be able to get HRA exemption u/s 10(13A) and Interest deduction u/s 24(b)


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Category Income Tax
Other Articles by - Shudhanshu Agrawal 




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