HRA vs Home loan - deductions

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B K Panchal (Querist)

03 March 2011 An employee gets HRA, he stayed in a rented house in Surat till 30-9-2010 in current F.Y., for which he paid rent.
He is also paying a home loan for his residential house in Surat of which he got possession on 1-10-2010 and stays since then in the new house.
Can he claim deduction as follows under three diff. sections?
1. for HRA u/s 10(13a) - April-Sep 2010.
2. repayment of Home loan u/s 80-c for
the period Oct-10 to March 11.
3. interest on home loan in five years
w.e.f. 2010-11.
Kindly advise.Thank you.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

03 March 2011 Where he has purchased the flat ? on L P Savani Road or in Vesu?

However, answer to your queries is as under
1. HRA will be allowed April-Sep 2010.
2. a. 80C allowed for the period mentioned by you.
3. Interest on homeloan on accrual basis for the financial year only.
Suppose he has taken loan on 1.4.2010
full year's interest will be allowed.
If the Loan has been taken before April 2010, that interest will be considered as pre construction period interest and that is to be claimed in 5 installments.

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