CA Bijay Kr. Saha (Asst.Mgr. Accts. & Fin) (72 Points)
02 January 2010Dear All
I have query pls solve it. Is it possible that an individual can get Sec 10(13A) as well Sec 80C for interest on Home Loan. The intresting thing is that the Individual is residing in Rented House since the owned house is still under construction.
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 02 January 2010
In my opinion, the client may claim exemption for HRA under sec 10(13A).
Deduction under 80C is only regarding the repayment of principal amount and not the interest.The interest can be claimed while calculating income from house property
Kiran Joshi
(Artilcled Assistant)
(34 Points)
Replied 02 January 2010
Hi
In my opinion you can clai deduction u/s 10 (13A) only.
Housing loan interest deduction will be available fron the year when you take the possession of house.
kumarsatish022
(Professional)
(165 Points)
Replied 02 January 2010
In my opinion, HRA shall be permissible if:-
1) Individual is an employee
2) Receiving HRA and living in rental premises producing receipt of same
and as far as Interest on Loan for House construction goes , shall be claimed under House property and not under 80C limit applies as 80C allows instalment for loan and hence bifurcation need to be done.
C.Balaji
(Learner)
(1867 Points)
Replied 02 January 2010
in my opinion HRA exemption can be claimed u/s 10(13A).......but interest , cannot be claimed u/s 80c.... 80c talks about Principal Repayment....... Interest can be claimed u/s 24 after letting out the property......
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 02 January 2010
Dear C.Balaji,
Some clarifications:
Interest will be calimed u/s 24(b) even if the property is not let out.The interest will be claimed as pre-construction period interest.
Rakesh
(Asst Manager)
(209 Points)
Replied 02 January 2010
Yes Fatema is right.......... int ll be claimed for pre construction period also.
R!tu Ber!
(Chartered Accountant)
(405 Points)
Replied 02 January 2010
i agree fati and Kumar Satish both gave us a clear view of the solution to the problem put up by our collegue.
C.Balaji
(Learner)
(1867 Points)
Replied 02 January 2010
i agree with Fatema.....pre construction period begins from the date of borrowing and ends on date of repayment of loan or march 31 immediately preceding the date of completion of construction or date of acquisition, whichever is earlier.....so u can claim Pre construction interest only if the house is constructed/completed and u occupy \ let out the house .... in this case since the assessee claims HRA, if he self occupies a house he won't get HRA exemption....which means pre construction interest can only be claimed from the year in which it is completed and/or letout......
Nicky
(Chartered Accountant)
(245 Points)
Replied 02 January 2010
See People, Lets try and put things in perspective;
a) The question is erroneous and many have clarified that under 80C u can claim principal and not interest.
b) The situation he talks about is he has booked a flat and still not got the possession and hence wants to claim both HRA and deduction u/s 80C
He is entitled to both benefits
C. Balalji stated “in my opinion HRA exemption can be claimed u/s 10(13A).......but interest , cannot be claimed u/s 80c.... 80c talks about Principal Repayment....... Interest can be claimed u/s 24 after letting out the property......”
He meant I guess after the property is first brought to tax which he has explained subsequently in detail.
Fatema stated “In my opinion, the client may claim exemption for HRA under sec 10(13A).
Deduction under 80C is only regarding the repayment of principal amount and not the interest. The interest can be claimed while calculating income from house property”
Here fatema was correct but for the fact that interest can be claimed only from the year the property is brought to tax and not in earlier years.
And just a small piece of additional information
Any expenditure incurred towards stamp duty, registration charges for purchase of house is eligible.
Jigar Shah
(Chartered Accountant)
(692 Points)
Replied 03 January 2010
In a nutshell, here the individual can claim HRA u/s 10(13A) or 80GG as the caseand interest whether pre-construction or post contruction, provided, he can claim interest from the year of completion.
CAclubindia
