12.1 C
New Delhi
Thursday, December 8, 2022
HomeBusinessDo you have to forego HRA exemption to claim interest deduction on...

Do you have to forego HRA exemption to claim interest deduction on home loan?


I am currently working with a company in Chennai and live in a rented house against which I claim a tax exemption from the House Rent Allowance (HRA) in my salary. I want to buy a house in my hometown in Telangana where my parents can live and I also intend to move back in a few years.

Can I get any tax benefits for purchase of a house even if I don’t live there? If yes, will I have to forego the exemption benefit of HRA which I am currently getting?

– Name withheld on request

A general confusion among salaried people is whether they will have to forego the exemption benefit of House Rent Allowance (HRA) received from their employer to claim a deduction of interest on their home loan.

Since you are currently claiming the tax exemption for HRA, you must have opted for the old tax regime.

When a taxpayer owns a house property in respect of which he services a home loan but resides in a different city owing to work or any other justifiable reason, he may be entitled to claim the following benefits in Income Tax under the old tax regime:

i) Tax exemption basis section 10(13A) of Income Tax Tact for rent paid against HRA received from his employer

ii) Deduction from taxable income (up to 2 lakh a year) under section 24(b) of the Income Tax Act for interest paid on the home loan of the owned property

iii) Deduction from taxable income (up to 1.5 lakh a year) under section 80C of the Income Tax Act for principal repayment of the home loan for the owned property

However, none of the above benefits is available if a person has opted for the new tax regime introduced in the financial year 2020-21.

(Query answered by Amit Bhachawat, CFO, India Mortgage Guarantee Corp. If you have any personal finance queries, write to mintmoney@livemint.com to get them answered by experts.)

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint.
The Mint News App to get Daily Market Updates.

More
Less



Source link

- Advertisment -
- Advertisment -

Our Archieves

- Advertisment -