HRA/80C/Interest on Housing Loan

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Amitav Lohariwal (Querist)
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10 January 2008 One of my friend is employed in a company in Bangalore and receives HRA from the company, He resides in a rented house and also he has purchased a residential flat in the same city but does not resides there and the property is vaccant, my question is whether he is eligible to get deduction of HRA u/s 10 (13A)and at the same time deduction u/s 80C. Whether the interest paid on housing loan is eligible for deduction u/s 24 as the property is being a self occupied one. please suggest

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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10 January 2008 The conditions for deduction in respect of HRA are that the claimant must be in receipt of HRA and he must actually pay rent for the accommodation occupied by him. This does not preclude him to claim deduction u/s 80C.

As regards your next query clarification is needed as to how the property can be said as self occupied when the person is not residing in the property

CA. Aryendra

CA. Aryendra (Expert)
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10 January 2008 Dear Sir,

All the deductions will be allowed

Please read section 23(2) (a) and (b) and be prepare, how will you justify that assessee residing at other place due to his employment.

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K V Subba Rao

K V Subba Rao (Expert)
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10 January 2008 (1) In respect of rent actually paid for self residence, the assessee is entitled to claim deduction of HRA u/s 10(13A) notwithstanding a seperate Flat being owned in the same city

(2) For Flat purchased,

(a) the assessee is entitled to claim IT benefits u/s 24 as well as 80-C

(b) Fair rental value shall be included under Income from house property

I also suggest you visit www.apnaloan.com in which several FAQs relating to house property are dealt with

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
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11 January 2008 hra received u/s 10(13A)are allowed under the income tax act
your second quiry if you are recied in the same city and the house is vacaed during the year the house is deemed let out and you will get deductin as muncipal tax 30% deduction as repairs and maintance & interest paid on boorowing of loan, Principal amount of loan is not deductable u/c 80c