Can I claim Income Tax benefit on both HRA and home loan?

There is no limit on claiming a simultaneous tax benefit for HRA and a home loan for the same year.

In order to receive HRA benefits, you must satisfy the condition that you are currently paying rent for the residential accommodation you occupy and which is not owned by you. The HRA benefit shall be measured for the period for which the rent is actually paid and not for the year as a whole. And you will be able to claim the HRA benefit before you pay the bill on the rental home.

home loan

Similarly, in order to claim the interest under Section 24(b), you must pay interest on the loan taken to purchase the property that is your property and is in your possession. Please notice that you will be entitled to claim interest for the entire year as there is no requirement for a proportionate tax allowance under Section 24(b). So even though you took ownership of the house on the last day of the financial year, you would still be entitled to claim rent for the entire year.

In the case of interest paid before you have taken possession, the same balance will be stated in five equivalent instalments , starting with the year in which you took possession of it. For self-occupied land, the gross interest argument consisting of interest during the construction phase as well as for the current year is limited to two lakh rupees per year and the excess interest above two lakh rupees would have to be ignored.

hra

In the case of let out property, the full interest is allowed but the loss under the house property is required to be compensated against other income to the amount of two lakh rupees per year and the loss not so set off is eligible to be carried forward and written off against the revenue under the heading “Income from other sources” for the next eight years. So you’ll be able to claim HRA for 11 months. The interest for the year 2019-2020 and 1/5 of the total interest charged before 31 March 2019 will also be permissible under the limit of ₹2 lakh7 as this is your self-occupied house.

Recent Post:-

Section 80GG Deduction for Rent Paid

Don’t you  receive  HRA from your employer

Typically, HRA is part of your salary and you can claim a discount for HRA. If you do not receive an HRA from your employer and make payments for rent for any furnished or unfurnished accommodation you occupy for your stay, you can claim a deduction under Section 80GG for the rent you pay. Here are some of the conditions that must be met –

  • You are self-employed or salaried
  • You did not receive HRA at any time during the year you claim 80GG
  • You, your spouse or your minor child in which you are a member do not have any residential housing in the place where you currently reside or perform office duties, work, work or occupation.
  • If you own any residential property anywhere, your income is calculated from the home within the applicable divisions (as a self-owned enterprise), no deduction is allowed under section 80GG.

You will be asked to submit a 10BA form with details of the rent payment.

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Discount – the lowest will be considered as a deduction under this section –

A Rs 5000 per month

(A) 25% of total income (income to exclude long-term capital gains, short-term capital gain under Section 111A and revenue under Section 115A or 115D and deductions 80C to 80U.

(B) actual rent less than 10% of income (income to exclude long-term capital gains, short-term capital gain under Section 111A and revenue under Section 115A or 115D and deductions 80C to 80U.

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