DEDUCTION FOR HRA AND REPAYMENT OF HOUSING LOAN

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2010 I am salarised person and getting HRA.

At the same time I have taken a housing loan from nationalized bank for purchase of house property(FLAT)and making monthly installment payment to the bank.

The house property(FLAT)is still under construction so I am occupying rented house nearby my workplace and paying rent.

Now my query is that whether deductions for rent payment and repayment of housing loan(u/s 80C) are simultaneously admissible while computing salary income for TDS.
Please any body can provide any court/tribunal decision or CBDT guidelines.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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10 April 2010 you can claim the HRA presently up to the construction is over and principal of housing loan also under section 80C, but the interest on housing loan u/s/24 can be claimed after the construction is completed from that year(with 1/5th of the preconstruction period interest)

K V Subba Rao

K V Subba Rao (Expert)
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11 April 2010 I agree with Sri Krishnan.

You may also like to visit http://business.rediff.com/report/2010/mar/30/perfin-you-can-claim-hra-and-home-loan-benefits.htm

where a Query relating similar situation was addressed as follows:

"3: Your house cannot be occupied at this point (e.g. under construction)

You have bought a house in Mumbai taking a home loan and you're currently living in Mumbai in a rented apartment because the house is under construction. In such a case, you are eligible to claim HRA.

In the case of tax breaks on the home loan, you can claim tax benefits only for your principal before the completion of your house. Once your house is completed, you can claim tax benefits on the total interest paid up to the date of completion in five equal installments in five years beginning from the year of completion."

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Querist : Anonymous

Querist : Anonymous (Querist)

12 April 2010 Thanks experts,

But if on after construction completion, due to job requirement, the own house is not occupied and live nearby the workplace or in different city.

In this situation whether tax treatment would be different?

If any case law available.

K V Subba Rao

K V Subba Rao (Expert)
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12 April 2010 You will be entitled for both rent paid as well as for your own flat. Please check the following link:

http://www.apnaloan.com/home-loan-india/taxdeductionbenefitsforhlhra.html