House Loan & HRA

This query is : Resolved

CA Anand Sarda (Querist)
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29 July 2010 Dear All,

My new house is getting constructed and i am shifting there from 1/09/10. I am a salaried employee. I have taken home loan on 3/4/10 and i am paying interest from May 10. EMI will start from Oct'10.

Can i claim HRA for 5 months under sec 10 and interest from May'10 to Mar'11 under section 23?

And for claiming interest, there is limit of Rs 150000. Will this limit applies proportionately?

and similarly for repayment of home loan deduction under 80C?

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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29 July 2010 Yes. you can claim HRA for 5 months.

Interest & loan prepayment rebate is available on annual basis, so it will be allowed as whole amt subject to the limit.

Proportion is not required

CA Anand Sarda

CA Anand Sarda (Querist)
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29 July 2010 Dear Subhash,

thanks for the information. Suppose if i shift to my new home in the next FY(2011-12). then can i claim HRA, Interest and principal repayment in the current. The other conditions are same.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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29 July 2010 Yes, you can claim HRA for the whole year as well as 80C for loan repayment & interest upto 150000/-

DR GAURAV GUPTA FCA, FCS, LL.B

DR GAURAV GUPTA FCA, FCS, LL.B (Expert)
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29 July 2010 no if u will be shifted to new house then full Hra is taxable because u are not paying any rent

CA Anand Sarda

CA Anand Sarda (Querist)
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29 July 2010 Dear Gaurav,

I asked if i shift in the next FY(2011-12), then can i claim HRA, interest and principal repayment in the current FY(2010-11).

But i think, i can claim HRA in the current FY (2010-11), and cant claim interest and principal as i have not shifted. and can claim this interest(i.e interest for FY 2010-11) as pre-construction interest in the next FY(2011-12) and deduction for repayment of housing loan will be allowed from next FY(2011-12).

Please correct me if i am wrong?

THanks
Anand

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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29 July 2010 you can claim the HRA when you are paying rent no issues on that, but interest you can take two options

1. you can claim interest as the house remain vacant ( if consider LOP)

2. if you want claim as self occupied, incase as per sec 23(2)(b), due to employment purpose not staying in own house

so refer the sec.23(2)(b)

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