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Wednesday, 9 August 2017

Can you claim both HRA & deduction on home loan interest?

Yes, a person can claim exemption on HRA as well deduction for Home loan interest provided he/she stays in a rented premise. Sometimes it happens, you are staying in rented premises near your workplace and you also own a house which is lying Vacant or your family is residing in it. So you can easily claim all tax benefits related to Home loan and as well as exemption on HRA. You can also stay on rented House owned by your parent or relative and claim exemption for the rent paid. You can’t claim exemption for rent paid for House owned by your Spouse.
HRA being a part of a salary becomes completely taxable if an employee does not stay in a rented premises. To claim exemption for HRA (House rent Allowance), you being an employee need to stay in a rented premises and pay rent for it. The exemption amount which you can avail will be lower of the following:
-HRA paid by employer
-Rent paid minus 10% of Salary*
-For the residents of Metro Cities (Only Mumbai, Kolkata, Delhi or Chennai) 50% of basic salary (For the residents of Non-Metro cities, 40%)
*Salary here means Basic salary + Dearness Allowance + Commission based on fixed percentage on turnover.

3 comments:

  1. Income tax deductions while getting a home loan is a suitable benefit. However, a reliable advice from a professional is a must and you need to do personal financial planning upfront so still you can repay it during tough times.

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