15 January 2011
a salaried person doing job in Dadri(noida)
He is living in ghaziabad on rent & also have a house in ghaziabad for which he took a home loan. he want to cliam rent exmption & home loan interest exemption.
He can cliam for both or only one.
& if he is living in dadri & his house is vacant whole year than he can claim both exmp or not.
HRA exemption There is nothing in the I T Act which says if you have house in same city , you can not claim exemption u/s 10(13) on HRA allowance. So, if you get HRA , you can always compute and claim exemption on house rent allowance . Most important condition is rent payment evidence. 80C deduction. 80C deduction is allowed on payment of principal amount of loan. Therefore , even this deduction is claimable irrespective of issue whether you have a house in the same city where you live in a rented house. The only important condition is that you should have a certificate from loan lender regarding amount of repayment of principal loan. Now comes the Interest u/s 24 under house property Nowhere , it is mentioned that if you are staying in a rented house , you will not get the deduction of interest paid or payable on the loan borrowed and used for buying the house .What it means that everyone who buys or constructs a house will get deduction of interest u/s 24 of the I T Act , so long as his income from house property is charged to tax. But there is one exception to the rule that the house property income must be charged in order to claim deduction u/s 24 . That is , in case of one self occupied house , the value of the house will be taken NIL , but one can still claim the interest deduction. The rule that the house must be self occupied is also has one exception. That is if the house could not be occupied for the reason of employment or profession . For example , if you have a house in Banglore , you pay interest on borrowed loan, and you have been transferred out of Bangalore. In that case although , you are not self occupying the house at Banglore, you as per section 23 of the I T Act you can still claim the annual value of property as NIl and can claim interest deduction.Section 23(2) is as follows Section 23(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.
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):
property is in the occupation of the owner for the purpose of his own residence; or 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):
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 It is concluded 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)
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