House property

This query is : Resolved

ANJALI NEGI (Querist)
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08 November 2012 my case is : i stay with my parents and so i give rent to my parents as house is owned by them. and i claim HRA exemption for that. second i have bought one house in some other city on housing loan and i want to claim interest & principal deduction agianst it. my question is, this house what status would IT dept considered.....i mean whether it would be considered empty or let out. it let out then i have to show its rent also. please guide me. at present the house is under my posession and is empty.

CA Manish

CA Manish (Expert)
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08 November 2012 Can we claim HRA deduction u/s 10(13A) and Interest on housing loan u/s 24(b) simultaneously if both are in the same city?

Solution:

First we should refer to the related provisions under the Income Tax Act, 1961. All relevant sections are mentioned below:

Section 10(13A) requires 2 conditions for claiming HRA exemptions:

1. The residential accommodation occupied by the assessee should not be owned by himself; and
2. The assessee has actually incurred expenditure on payment of rent in respect of the Residential accommodation occupied by him.

Annual Value of Self Occupied Property as per Section 23(2):

1. property is in the occupation of the owner for the purpose of his own residence; or
2. cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house or part of the house shall be taken to be NIL.

Deduction for interest as per Section 24(b):

1. where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital

After going through the above section it is clear that both the deductions can be taken simultaneously if all the conditions mentioned in above sections are fulfilled. Moreover, there is no provision which is prohibiting the deduction and exemption. The Delhi High Court in the case of CIT v. Mr. Justice Avadh Behari Rohtagi [1986] 157 ITR 441 held that the word used is “any other place” so if any person has taken any house on the rent and at the same time he is also having the house property in the same city deduction in both should be allowed as there is no provision which is prohibiting the same.

So we can conclude that if a person has a house property and he is also paying the rent for any house property in the same city but at different place then he will be able to get HRA exemption u/s 10(13A) and Interest deduction u/s 24(b)

I hope this has solved your query.

CA Prashant Gupta

CA Prashant Gupta (Expert)
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08 November 2012 as you are paying rent to your parents then you can take HRA exemption. there is no problem.
and for second query, as your house is in other city and you are not living in it but own it. So you can claim interest and principal exemption also
No problem with that. Income tax Act doesn't stop you for this.

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