Claiming hra and housing loan deduction

HRA is exempted under Section 10 (13A) of the Income-tax Act, 1961. While Home loan interest is deductible u/s. 24B of Income tax act. Both are independent sections, not binding each other for its applicability.

So, if you are getting HRA from your employer........ you are eligible for its claim as per limit specified in the section. On the other hand, if you are servicing a home loan you can claim tax benefits on principal and interest payments. Principal repayment, under Section 80C of the Income Tax Act, is exempted up to Rs. 1.5 lakh. And on interest repayment, exemption can be claimed up to Rs. 2 lakh, under Section 24B.

Well, in some cases, the Income Tax Department may question the tax exemption taken on both HRA and home loan. But if the claim are genuine, they are not denied. As the bursen lies over the assessee, in all such situations, the individual has to ensure that the related documentations (like lease deeds, possession/completion letters, etc.) and justification regarding occupying both the houses in same city are readily available with him/her if the such query is raised.