Hra exemption

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 March 2012 I wish to consult on one of my case which is as follows:-

I have bought a house in Faridabad taking a home loan and now I am not residing in it but are living in a rented apartment in Faridabad itself for genuine reasons e.g.

a) The house that I have bought is far away 12 KMs from my office.

b) My kids schooling is less than 0.5 kms from my rented house whereas if I relocate to my house the distance would be 12.5kms .

c) The development of the area does not suit the environment I want to give to myself and my family.

My question is in such cases does the Income Tax Act permits the individual to claim HRA and home loan benefits which includes both principal and interest repaid on the home loan.

Also, please note that if my house remains vacant, then I shall still need to pay tax on a notional rent income.

Kindly suggest what should be done.

CA. Nitin Agrawal

CA. Nitin Agrawal (Expert)
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05 March 2012 As far as deduction of Loan & Interest payment, there is no issue. You can get the benefit of the same in any condition.

Now coming to the claim of HRA, the same will be available because you are residing in other house due to performance of the job and have some valid reason/ground.

Regarding Notional Rental of Vacant house, in my view you need to calculate the Income from house property under notional rental. Other experts opinion sought regarding this point to confirm/differ from my view.

Now Cheers

Regards