Sec 10(13A) & 80C

In my opinion, the client may claim exemption for HRA under sec 10(13A).

Deduction under 80C is only regarding the repayment of principal amount and not the interest.The interest can be claimed while calculating income from house property

Hi

In my opinion you can clai deduction u/s 10 (13A) only.

Housing loan interest deduction will be available fron the year when you take the possession of house.

In my opinion, HRA shall be permissible if:-

1) Individual is an employee

2) Receiving HRA and living in rental premises producing receipt of same

and as far as Interest on Loan for House construction goes , shall be claimed  under House property and not under 80C limit applies as 80C allows instalment for loan and hence bifurcation need to be done.

in my opinion HRA exemption can be claimed u/s 10(13A).......but interest , cannot be claimed u/s 80c.... 80c talks about Principal Repayment....... Interest can be claimed u/s 24 after letting out the property......

i agree iwth fatema

Dear C.Balaji,

Some clarifications:

Interest will be calimed u/s 24(b) even if the property is not let out.The interest will be claimed as pre-construction period interest.

Yes Fatema is right.......... int ll be claimed  for pre construction period also.

i agree with fatema ...............

i agree fati and Kumar Satish both gave us a clear view of the solution to the problem put up by our collegue.

i agree with Fatema.....pre construction period begins from the date of borrowing and ends on date of repayment of loan or march 31 immediately preceding the date of completion of construction or date of acquisition, whichever is earlier.....so u can claim Pre construction  interest only if the house is constructed/completed and u occupy  \ let out the house .... in this case since the assessee claims HRA, if he self occupies a house he won't get HRA exemption....which means pre construction interest can only be claimed from the year in which it is completed and/or letout...... 

See People, Lets try and put things in perspective;

a) The question is erroneous and many have clarified that under 80C u can claim principal and not interest.

b) The situation he talks about is he has booked a flat and still not got the possession and hence wants to claim both HRA and deduction u/s 80C

He is entitled to both benefits

C. Balalji stated “in my opinion HRA exemption can be claimed u/s 10(13A).......but interest , cannot be claimed u/s 80c.... 80c talks about Principal Repayment....... Interest can be claimed u/s 24 after letting out the property......”

He meant I guess after the property is first brought to tax which he has explained subsequently in detail.

Fatema stated “In my opinion, the client may claim exemption for HRA under sec 10(13A).

Deduction under 80C is only regarding the repayment of principal amount and not the interest. The interest can be claimed while calculating income from house property”

Here fatema was correct but for the fact that interest can be claimed only from the year the property is brought to tax and not in earlier years.

And just a small piece of additional information

Any expenditure incurred towards stamp duty, registration charges for purchase of house is eligible.

• u/s 10(13A) an individual can claim HRA if he is paying rent via rent receipt on which PAN number of the lanlord is quoted. So in the present case, he can claim HRA if he is paying rent and if he is an salaried individual receiving rent as his salary portion.
• If he is doesnt fall in the above mentioned category he can clain rent u/s 80GG
• As far as interest portion is concern u/s 80C, an individual can only claim deduction upto Rs 100,000 on principal amount i.e principal repayment of home loan and not interest.
• An individual can claim the interest portion u/s 24(b) upto Rs 150,000 if it is for the purpose of acquisition, renovation,construction,repairing or reconstruction.
• Note: The above exemption is irrespective on the number of houses, the important aspect is the upper limit and not number of houses.
• Also, it is important to note that interest for the pre-construction period will be amortised for a period of 5 years.

In a nutshell, here the individual can claim HRA u/s 10(13A) or 80GG as the caseand interest whether pre-construction or post contruction, provided, he can claim interest from the year of completion.