Saturday, April 20, 2024
HomeMoneyCan you claim tax benefit on both HRA and home loan repayment?
Money

Can you claim tax benefit on both HRA and home loan repayment?

Manisha Rao
By Manisha Rao
0
338
Can you claim tax benefit

Estimated reading time: 3 minutes

It is often seen that some salaried people live in rented house in the city of their work while their families (wife, parents dependent children,) live in a different city in a self-owned property purchased with a home loan taken out by the employee. Type of the employees frequently want to know if they may claim tax deductions on both their company’s House Rent Allowance and the tax benefit on their home loan interest and principal repayment.

Yes! A salaried employee can claim both of these benefits under the rules 196 of the Income Tax Act, if certain conditions are met. This benefit is available even if the house was purchased with a home loan and is living in the same city where the employee works and lives in a rented accommodation. You can also claim both House Rent Allowance and home loan tax benefits if you have rented out your property and are living in a rented dwelling in the same city. According to tax experts, as long as one meets the requirements for claiming the H.R.A. deduction on a rental home and the requirements for claiming tax benefits on a home loan, he can claim both of these benefits.

However, if you file a claim a tax deduction on H.R.A. but do not live in the rented housing, the IRS (Internal Revenue Service) may pursue you. As a result outlook, these 2 benefits should only be claimed in legitimate instances and not to avoid paying taxes.

If a salaried person receives H.R.A. as part of compensation, one can claim deduction on house rent payment. And other  requirement is, that you should be paying rent for the place you are renting. You cannot claim the H.R.A. deduction if your parents or spouse are paying the rent for the residence where you are staying. Another stipulation is that the rent paid should not be considered for property that you own. This advantage cannot be claimed by you if you are a joint owner of the property.

The house for which you have taken a home loan must be completed to move in and you must have taken ownership of the property in order to file claim a tax benefit on the home loan. However, you will not be able to claim tax benefits for properties that are still under development or not taken ownership so far. You must also be the owner of the house property and a co-borrower on the home loan used to purchase or build the property. In the case of jointly-owned residential property, tax benefits will be available based on your portion of the home loan services provided by you, not on your part of share of the property.

You can deduct up to ₹2,00,000 in interest payments on a home loan in a calendar financial year under Section 24(b), and you can deduct up to ₹1,50,000 in principal repayments under Section 80C.

Google News

Latest Stories

RELATED ARTICLES
- Advertisment - NIT Infotech

ReferSMS provides the latest news and information on technology, business, sports, travel, parenting, health and more. Get the latest scoop on the go with our mobile-friendly site.

Contact us: contact@refersms.com

FOLLOW US

© ReferSMS 2016 - 2024, All Rights Reserved