Tax Query: HRA and Interest on Borrowed Capitla

Dear All,

Our some employees has submitted the proof of HRA and Interest on borrowed capital for construction of House. Can we allow the both of deduction under the

Income tax act?

Thanks

Parmod

 

Replies (3)

As per my logic they both are allowed because:

1.They both are deductible form income of different recpective heads of income

2.House loans can be taken for a house constructed elsewhere then place of residence

One thing yiou have to check that if they are claiming HRA & Interest on Borowed capital then they must not occupy the house or else thay cannot claim HRA as both deduction are not allowed in the above mentioned situtation

Dear Pramod,

Interest on House Loan & exemption of HRA can be claimed simuntaneously..No issues with that..

Only thing to make sure is that benefit of interest is allowed only upon completion of construction of house.i:e Employer should obtain a certificate from the employee regarding completion of construction.

Mr.Parmod

Interest on loan and HRA exemption can be claimed in the same year.....

 

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