Claim both house rent allowance and tax exemption on
housing loan
If you are a salaried
individual enjoying House Rent Allowances (HRA) from your employer and also own a
residential house, then you can have an option to avail the deduction of both
(a) HRA and
(b) Housing Loan repayment
(section 80C) & interest deduction (section 24).
The Income Tax Act, 1961
(“the Act”) treats HRA and home loan deductions under separate sections
independently. The two are not interconnected to each other.
HRA is dealt with in section
10(13A) of the act while home loans are entitled for tax benefits u/s 80C for
principle repayment and u/s 24 for interest payment.
When you
can claim both the deductions?
Both the deduction can be
claimed if you satisfy any of the following conditions:
1) You should own a house in
a city other than your work place.
2) You own a house in the same city but reside in a rented accommodation for a
genuine reason.
3) You can claim deduction U/s 80C for housing loan principal repayment and u/s
24 for interest payment of loan taken for your own house.
HRA exempt under section
10(13A) is monetary perquisite which is paid or allowed by the employer for
providing accommodation to employee. HRA deduction can be claimed for payment
of rent for accommodation.
If you are receiving HRA from your employer and reside in your
own house, then you can claim deduction in respect of home loan only. HRA
deduction is not available to you.
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