HRA and home loan deduction claim

Hi,

My question is - can a person claim home loan deduction for the house for which he has taken loan and then HRA deduction by living in the same house with his parents and paying rent to his father who is the owner of that house. Please Suggest.

Thank you.
Replies (11)
Quick Summary
This discussion clarifies whether an individual can claim both home loan deductions and House Rent Allowance (HRA) simultaneously. Generally, if you are the owner or co-owner of a property for which you've taken a home loan, you cannot claim HRA by paying rent for that same property, even to your parents. If you are only a co-applicant on the loan but not an owner, you may be eligible for HRA but not home loan deductions.

If house is owned by his father then housing loan pricipal, interest can't be claimed ..


Only owner of the house or co owner is eligible for housing loan deduction
The loan was taken on his name (he may be the co owner) and he is doing the repayments.
Now can he claim both loan deduction and HRA (by paying rent to father) as he is salaried employee and living in that same house.
Co-owner can't pay rent to himself for the same .

It's not legal to go for this option
Ok. Thank you for your response.

you are not eligible to take home loan deduction. but you can take exemption regarding HRA

Ok.. and what if he is not the co owner of the house but a co applicant of the loan repayments, then? will he be able to take both?
No..Only one deduction may be claimed subject to conditions

Hello swapna 

Both these benifits, i.e. HRA deduction under the head salary and deduction for home loan repayment under the head house property are mutually exclusive in your case.

There are two possible scenarios

1. The person has taken a home loan in respect of the home (in his own name) and is paying the EMI in respect of the same at regular intervals which implies he must be the owner or co- owner of the property in question.

Now, the owner cannot let his own house to himself and pay rent for the same. 

Hence, in that case HRA would not be available.

2. The house is owned in the name of a third party, in that case the loan might not be sanctioned in his name and hence he is not principally liable for the said repayment and hence not eligible for deduction for the same. In that case however, he may enter into a rent agreement, pay a certain amount of rent and claim that as a deduction of HRA.

it all depends upon whether he is the owner of the said property (either in whole or in part) or not.

Originally posted by : Swapna Singh
Ok.. and what if he is not the co owner of the house but a co applicant of the loan repayments, then? will he be able to take both?

See co applicant is not a owner of property. hence not eligible to take home loan benefit

If the assessee does not own the house property he is not eligible to get the benifit of deduction under the section so, he will only be able to able to get the deduction for HRA in that case.

Rent to parents
Housing Loan on parents property

These are risky things. IT Dept is issuing lakhs of notices from past few days .

Make sure that there are grey areas

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