Hra & home loan

If you have taken a home loan to purchase the house you are residing in then you are not entitled for the HRA benefit since you are not residing on a rented property. However tax benefits on principal repayment and interest payments can be availed by the person.

Dear Rama if the flat is uder constuction that is there is no completion certifiacte in that case can he get benefit on principle & interest.... pls let us know...........

Pranay Ji,

1. Principal Amount of Loan can be claimed under section 80(2)(xviii) "there shall be deducted ...the whole of the amount paid....for the purchase of or construction of a residential house....towards or by way of repayment of loan borrowed by assessee from...". This amount can be claimed u/s 80C.There is no mention whether the house is complete or not.

2. Interest can br claimed u/s 24 upto Rs 1, 50, 000 per year w.e.f the date of borowing but only after the completion of the house whether self occupied or given on rent. The total interest paid or payable for the period begining from the date of borrowing to the date of competion (i.e, 31st March just preceding the date of completion) can be claimed in five installments begining from the 1st April just after the 31st March as above). It does not matter whether ithe house is self occupied or given on rent.

3. HRA CAN ALSO BE CLAIMED WHETHER YOU ARE LIVING IN OEWNED OR RENTED HOUSR.

All the three claims can be claimed simultaneously except that interest for pre-completion period can be clained only after the completion of the house in five installments

It does not need any special mention that current interest can also be claimed after the hose is given completion.

Thanks Dr. Gupta & Harsh, it means I do not claim for the Interest when the flat is under construction, only claim principal and HRA only....am I right...