Hra and loss on house property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 September 2012 Dear Expert,

Can you please confirm the below understanding

a) Mr X lives in ABC city in a rented property where he pays a rent of Rs 30000 per month.

b) He buys a house by taking home loan in the same city ( ABC ) and puts it on rent for Rs 25000.

c) His annual interest paid for the home loan is Rs 800000.

In the above case he can claim HRA as per HRA exemptions also he can avail a Loss from House Property to the tune of -5,90,000 (8,00,000 - 2,10,000)
where 800000 is the interest paid and 2,10,000 is the earning from house property ( 25000* 12 = 3,00,000 - 30% standard deduction )

Thanks and regards

Amol S Joglekar

Amol S Joglekar (Expert)
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30 September 2012 Yes. He can do so. The choice of stay whether in rented or self owned is with the assessee and not with the income tax department. The facts must, however, support the reality. It should not be a mere PAPER adjustment.

Querist : Anonymous

Querist : Anonymous (Querist)

30 September 2012 Dear Amol,

Thanks for the inputs, so the assessee can continue to live in the rented accomodation and avail the loss in house property in the same city.

Amol S Joglekar

Amol S Joglekar (Expert)
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30 September 2012 Forget about the same city, he /she may do so in the same building... even adjacent flats in the same building.

Querist : Anonymous

Querist : Anonymous (Querist)

30 September 2012 Thanks a lot, that is a great news.But how can one give rent for the same building and avail loss in house property.

Amol S Joglekar

Amol S Joglekar (Expert)
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30 September 2012 Please think of APARTMENT kind of building. Flat no 1 and 2 are adjacent flats (apartments)

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