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HRA and Housing Loan

suneel (accountant) (121 Points)

25 June 2019

Hi Sir/Madam,

can an employee claim both HRA and Housing loan at the same time .
the house in same city and he stays in rented house and new house given for rent .

pls give your valuable input .

thanks.

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 26 June 2019

In your case when rental income offered to tax, HRA claim will be allowed.

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Suresh Thiyagarajan (Student) (3986 Points)
Replied 26 June 2019

1. Though both sec 24(b) and 10(13A) are different and operate independently. The practical scenario in most of the cases is that they would be having a house property and repaying the loan on the same and stay in another house and claim HRA exemption u/s 10(13A)
2. The important point is both the above section operates exclusively and one is in no way operates with other. Hence, if an assesse as long as he satisfies the conditions for claiming HRA u/s 10(13A) ( by staying in a rented house other than his own house ) he can avail the benefit.
3. With respect to housing loan repayment ( principal and interest ), the same can be availed as long as the conditions attached to it is fullied. If the rent received on house is shown under Income from house property, interest paid on the same can be availed and the same will be considered as cost while computing capital gains.
4. So both sections operate separately and the assessee can be benefitted.
Yes. both can be very much claimed.

raja sekar (1435 Points)
Replied 26 June 2019

most of the govt employees living in own house and claiming HRA. how would the dept find this. do they have any steps

Mohanraj J (1162 Points)
Replied 26 June 2019

I am living in rental house. recently we procured land for construction and paying loan n interest n will be built in the yr 2020. Shall I eligible for claiming HRA n Interests for Plot Purchases?

Suresh Thiyagarajan (Student) (3986 Points)
Replied 27 June 2019

1. As long as you satisfy the conditions attached to sec 10(13A) and sec 24(b), both can be claimed.
2. In your case since you are staying in a rented house and paying rent, HRA exemption u/s 10(13A) can be claimed.
3. However with respect to interest on housing loan u/s 24(b) it can be claimed only from the year in which the construction was completed. Pre-construction interest in 5 equal installments can be claimed once the construction was completed. Interest to the extent of Rs. 2 lakhs will be allowed as interest on borrowed capital.
Please correct me if the above solution has an alternative view.

1 Like