Hra

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Padmaja CA (Querist)
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07 February 2012 Sir

One of Our org Employee had Housing loan which is still in costruction and she pays EMI in consturuction period and she live in Rented house
my dought is Whether she get Both HRA and Housing loan Interest& principle amount for deducting TDS

Please Clarify me Sir

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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07 February 2012 Interest accrued or paid on housing loan during the construction period/before the occupation of the property is called pre-occupaied interest it would be deduct equally upto 5 years from the year of occupation. So for your case the occupation not done in this year then you take only HRA exemption. In the year on which they occupaied their property take HRA exemption upto the preceding month to the date of occupation and from the month of occupation consider only Interest on Housing loan. In One word for your case upto the occupation of the property you need not to consider Interest on Housing loan. For detail clarification please refer section 24(b) of the Income tax Act,1961. However there is chance to claim both HRA and housing loan interest as per section 24(b) says pre-occupaied interest means a) interest accrued to the preceding month to the commencement of the EMI or b) interest accrued to the end of the financial year preceding to the occupation of the property which ever is earlier. For your case if condition a) above satisfies i.e EMI starts before the completion of construction or occupation of the property then 1/5th of the interest accrued or paid upto the commencement of the interest and total interest from the date of commencement of EMI and HRA Both consider for TDS purpose. I will explain you with the example.
OM SAI SRI SAI JAI JAI SAI

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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07 February 2012 Let assume HRA exemption for the FY 2011-12 is Rs.50000. EMI on Housing loan started from 1st December 2011 and interest accrued upto 30-11-2011 is Rs.15000 and interest accrued from 1-12-2011 to 31-3-2012 is Rs.7000. If the assessee satisfies the first condition of above explanation then you take HRA Rs.50000 and interest on housing loan of Rs.3000(1/5th of Rs.15000)+7000 as deduction.
SIMPLY IF THE EMI COMMENCES AS PER THE TERMS AND CONDITIONS OF THE LOAN AGREEMENT THEN YOU TAKE BOTH INTEREST ON HOUSING LOAN AND HRA OTHERWISE CONSIDER ONLY HRA UPTO THE DATE OF OCCUPATION OF PROPERTY.
OM SAI SRI SAI JAI JAI SAI

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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08 February 2012 Interest and principal repayment can't be claimed under section 24(b) and 80C respectively till the house construction is complete. HRA exemption u/s 10(13A) can be claimed during the period of construction.

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Padmaja CA

Padmaja CA (Querist)
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08 February 2012 tHANKU vERY MUCH sIR