Income tax deduction is claimed under several rules. Many employees are not aware of these rules that they can claim income tax exemption in different ways. At the same time, many employees claim income tax deduction either on HRA or on repayment of home loan. However, some people are still unaware of it. If you want to claim tax deduction on HRA or home loan repayment together, you can claim as per the rules mentioned here.
House Rent Allowance and Home Loan Tax Exemption
HRA is an allowance given by the salaried taxpayers for payment of rent. It is exempted from taxable salary under section 10(13A) of the Income Tax Act, 1961 (Act) subject to several conditions. Amit Gupta, MD, SAG Infotech says that both HRA and home loan deduction can be claimed at the same time. He said that to get tax exemption you must first be eligible for HRA. A person can be exempted from House Rent Allowance (HRA) as per section 10(13A) of the Income Tax Act, 1961 (‘Income-tax Act’).
According to a report in Mint, Anshu Agarwal, Finance Head (India), Branch International, says that the Income Tax Department allows you to claim both if you can prove that you cannot live in your home.
Sudhakar Sethuraman, Partner, Deloitte India said that a taxpayer residing in the same city where he has purchased his home through home loan can also claim both HRA and home loan tax benefits if the borrower has a distance, size or Has to live in a rented house due to any other valid reason.
Under what circumstances can you claim tax exemption?
If owns a house in one city but lives on rent in another city. Owns a house in a city but lives on rent in the same city. Renting out your house and living on rent in the same city. The house is under construction and is rented elsewhere.
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how much discount
You can claim tax exemption under home loan by claiming principal and interest. In this, tax exemption of up to 1.5 lakh can be availed under 80C. Apart from this, tax exemption can be claimed on the interest of Rs 2 lakh on the home loan.