how can i avail boh HRA and Housing loan interest exemption

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MURALI MOHAN V (Querist)
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10 February 2017 I am working in hyderabad and I has a owne house at Mumbai. I am paying rent in hyderabad and my family was staying at Mumbai. shall I get both exemption hra and interest on housing loan. if both house are in same city both exemption will get. can you provide section as per income tax and clarification.

Shishir Nayak

Shishir Nayak (Expert)
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10 February 2017 You can claim HRA exemption if you are living on rent, whereas you claim deduction for repayment of home loan. You can claim tax benefit for both, but only if you fulfil the conditions.

Let’s say you have bought a house by taking a home loan and you also live in it. In this case, you will not be able to claim HRA, but will be able to claim tax benefits on both the principal and interest.

If you have bought a house with the help of a home loan and live in another house on rent, you can claim tax benefit for both. But if the house you bought and the house you live in are in the same city, you should have a genuine reason for not living in the house that you own. The reasons could be that the house you own is too far from your workplace, or the commute is very difficult.

Shishir Nayak

Shishir Nayak (Expert)
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10 February 2017 FOR HRA Sec 10(13A). For Principal loan amount 80C and For interest on Home loan 24b

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MURALI MOHAN V

MURALI MOHAN V (Querist)
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10 February 2017 in different city I will get both exemption.

MURALI MOHAN V

MURALI MOHAN V (Querist)
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14 February 2017 I has taken home loans at Mumbai and purchase house at Mumbai. In that house my parents are staying. For employment purpose I am staying at Hyderabad and I am paying rent monthly. In this case shall I claim both HRA and loan as exemption.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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28 July 2024 Yes, you can claim both House Rent Allowance (HRA) and interest on housing loan under certain conditions, even if the properties are in different cities. Here’s a detailed explanation of how you can avail of these exemptions under the Income Tax Act, 1961, in India:

### **Eligibility for Both HRA and Housing Loan Interest Exemption**

**1. **Claiming HRA Exemption**

- **Eligibility**: You can claim HRA exemption under Section 10(13A) of the Income Tax Act, 1961 if you are paying rent for a house that you reside in.
- **Conditions**:
- **Rental Payments**: You must be paying rent for the accommodation in Hyderabad where you are staying for your employment.
- **HRA Calculation**: The HRA exemption is calculated as the least of the following:
- Actual HRA received.
- 50% of salary (basic + DA) if residing in a metro city (Hyderabad in your case).
- Rent paid minus 10% of salary.

**2. **Claiming Housing Loan Interest Deduction**

- **Eligibility**: You can claim a deduction for interest on home loans under Section 24(b) of the Income Tax Act.
- **Conditions**:
- **Property Location**: The property for which you are claiming the loan interest deduction is in Mumbai.
- **Purpose**: The deduction under Section 24(b) is available for the interest paid on a home loan taken for the purchase or construction of a property. The property can be self-occupied or let out, but it should be intended for your own use.
- **Maximum Deduction**: The maximum deduction available for interest on home loans is ₹2 lakh per annum for a self-occupied property. For a let-out property, there is no upper limit on the interest deduction.

### **Claiming Both HRA and Housing Loan Interest**

You can claim both HRA and housing loan interest deductions, provided you meet the conditions for each. Here’s how it works in your case:

1. **HRA**:
- You are eligible to claim HRA exemption for the rent paid in Hyderabad, where you are currently residing due to your employment.

2. **Housing Loan Interest**:
- You are eligible to claim a deduction for interest on the home loan taken for the property in Mumbai, where your parents are staying.

### **Specific Sections Referenced**

1. **HRA Exemption**: Section 10(13A) and Rule 2A of the Income Tax Rules.
2. **Housing Loan Interest Deduction**: Section 24(b) of the Income Tax Act.

### **Filing and Documentation**

1. **HRA**:
- **Documentation**: Ensure you keep rent receipts and the rent agreement as proof of rent paid. Your employer may require these documents to process your HRA exemption.

2. **Housing Loan Interest**:
- **Documentation**: Maintain records of your home loan interest payments and the loan statement from your lender. You will need to show this during tax filing.

### **In Summary**

- **HRA**: You can claim HRA exemption for the rent paid in Hyderabad.
- **Housing Loan Interest**: You can claim a deduction for interest on the home loan for the property in Mumbai.

You can avail both exemptions as they apply to different aspects of your housing situation: HRA for rent payments and housing loan interest for the loan taken for property ownership. Ensure you comply with the documentation and conditions for both claims to avoid any issues during tax assessments.

**Consult a tax advisor** or financial planner for personalized advice and to ensure that all deductions are properly claimed in accordance with the latest tax regulations.