Dear Sir,
Mr.X has one owned house in city A. He had taken a house loan for its construction and is paying interest.
On the other hand he lives in another city B in a rented house and also gets HRA from his employer.
Now he wants to claim deduction of interest paid for the construction of owned house and also the exemption of HRA he receives from the employer. Is it possible?
Yes It is Possible.
Please elaborate adequately for the conceptual understanding.
Yes.
If a salaried individual enjoying House Rent Allowances (HRA) from your employer and also own a residential house, then you can have an option to avail the deduction of both (a) HRA and (b) Housing Loan repayment & interest deduction.
The Income Tax Act, 1961 (“the Act”) treats HRA and home loan deductions under separate sections independently. The two are not interconnected to each other.
HRA is dealt with in section 10(13A) of the act while home loans are entitled for tax benefits u/s 80C for principle repayment and u/s 24 for interest payment.
When you can claim both the deductions?
Both the deduction can be claimed if you satisfy any of the following conditions:
You own a house in the same city but reside in a rented accommodation for a genuine reason.
Thank you so much sir... You have provided the detailed solution for my query.
Jawahar and Associates Chartered Accountants
Hyderabad
CA Inter
View Details
CCI
Pro
CAclubindia
