HRA exemption & deduction of house property loan interest ?

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This query is : Resolved

CA Seema Kochar (Querist)

10 March 2010 If a salaried person is getting HRA Allowance & he is accomdating in rented property whether he can claim deduction under head H.P for the interest on loan along with HRA exemption ?.
Situation 1.both rented & constructed house situated in same city.

Situation 2. Both the above mentioned house are situated in diff. city.

Rahul Gupta

Rahul Gupta (Expert)

10 March 2010 With refeerence to the sections>

10(13A) says > Any special allowance granted to an assesse by his employer to meet expenses actually incurred on payment of rent in respect of residential accommodation OCCUPIED by the assessee.

Section 24 says > For calculating IFHP , where any property has been acquired, constructed, repaired, renewed or reconstructed (there is no RESIDING word here) with borrowed capital, the amount of interest payable on such borrowed capital is allowed as deduction.
The interpretations indicates that the persons can reside in a house different from the house he owned and there is no mention of the place. So it can be anywhere in the same city or in different cities. Also, there is no restriction of any such thing in the Act, so if there is no denial, then deduction can be claimed as per the act by complying their respective conditions. Eg. Let us suppose You own house in Rohini and live in Noida near your office in a rented accommodation. Then you are paying interest on the loan for house in Rohini and also you are paying rent in Noida.

CA Seema Kochar

CA Seema Kochar (Querist)

11 March 2010 thanks

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