House Propery & HRA

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Kashyap Joshi (Querist)

25 May 2009 Suppose a person books a house,which is under construction and the possession will be given in DEC. 2010. There is an agreement to sell. (Down payment for booking being Rs 4 lacs).

Now, till DEC. 2010, the person stays in a flat from 1st April 2009 to 30th Nov.2010, which is hired by him (rent being Rs.10,000 /- p.m.) and the company pays Rs.12,000/-. p.m. as HRA.

Loan from bank (Rs 24 lacs) is taken on 1st Oct. 2009 @ 10% p.a.

1) How the Total Income will be computed for A.Ys. 09-10 and 10-11 ? (Assume salary is Rs. 35,000/- p.m.).

2) Also, if in the case of the flat taken on rent, the deposit amount of Rs.30,000/- and rent is paid in cash, can the benefit be claimed in IT (is it sufficient to show the agreement) ?

chetan soni

chetan soni (Expert)

25 May 2009 Considering the above facts, the calculations will be as follows :

Salary income (35K X 12) Rs. 420000
Less : HRA Exemption
Lease of followinf
1. Actual HRA Received Rs. 1.44L
2. Rent paid in excess of 10% of basic salary
(considered basic salary as 10K) so amount will be 1.08L
3. 50% of basic salary in case accomodation is in metro cities & for others 40%. So the amount will be 48000 @ 40%

HRA Exemption will be Rs. 48000.00

Taxable income will be Rs. 372000.00

Second Question:
The amount of deposit will not allowed as deduction as the same will be refunded & non permanent expenses. In case if the
rent is recovered from deposit then then that deposit will be treated as rent paid.

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