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Hra & deduction u/s 24

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piyush.a.k

158 Points Posted on 02 January 2013

Hi!! I am currently working in mumbai, and stay in a rental house with rent of Rs.10000/-p.m. I have also booked a flat in mumbai for which a EMI of Rs.15000 is bein deducted per month. My salary break up also shows a HRA break up of Rs.8500/-.p.m.

My question is whether I can claim both HRA from salary and Deduction U/s 24 as Interest Deduction under House Income which can be deducted from my taxable salary.

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CA Gaurav Verma

Chartered Accountant

78 Points Posted on 02 January 2013

As per explaination to Sec 10(13A) the deduction of HRA will be allowed if :-

1) the residential accommodation occupied by the assessee is NOT owned by him, AND

2) the assessee has actually incurred expenditure on payment of rent.

Also, Section 24(b) the interest on borrrowed capital can be claimed if :-

where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital:

AND

A certificate has been furnished by the assessee Taken from the person from whom loan has been obtained containing Interest & Principal repayble for the AY.

After Analysing both the sections, it can be concluded that both the deductions can be claimed simultaneouly.

There is no section prohibiting from taking dedcuction for 24(b) & HRA - 10(13A) simultaneouly.