HRA and Housing loan interest repayment and tax benefits

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Dhiraj (Querist)
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09 June 2009 Hi, can HRA and housing loan interest payment tax benefits be claimed at the same time by a person (in same city).

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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10 June 2009 There is no provision in income tax which prohibits a person from claiming exemption u/s 10(13A) in respect of HRA and deduction u/s 24(b) in respect of interest paid on income from house property, provided assessee satisfies the required condition to calm such exemption and deduction respectively

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taxindiaconnect

taxindiaconnect (Expert)
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10 June 2009 The section 23(2)(b)of income tax Act provides as follaing

2) Where the property consists of a house or part of a house which—
(a) is in the occupation of the owner for the purposes of his own residence; or
(b) 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.
So as per above sub section 2(b) of section 23, if any person has to stay in a house other then a house which he owns, due to employment at some other place, in such a case, he can claim HRA and deduction of Interest both. If someone claims both, he has to prove that he has paid rent due to some employment or business reasons. Like a letter issued from employer, as a condition may say that the employee has to stay within five kilometers of the office, then if the owned house if away, say 20 KM, it can be pleaded that the rent paid is for the reasons of employment.

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Dhiraj

Dhiraj (Querist)
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10 June 2009 I have 2 answers
There is no provision in income tax which prohibits a person from claiming exemption u/s 10(13A) in respect of HRA and deduction u/s 24(b)and
The section 23(2)(b)of income tax Act
Both are techincally correct- however if the house on which the loan exists in unoccupied by "not" because of employment contraints.
Can I still claim the HRA and the tax beneit on the home loan interest?

Radheyshyam Falod

Radheyshyam Falod (Expert)
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11 June 2009 If you are in the same city both cannot e claimed at the same time because you cannot pay rent to yourself. And if u have a house why not live in it. HRA can be claimed while house under construction.