Person owning a house in the same city but living in rented premises can avail HRA or not

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  1. Rashmi C

    Rashmi C New Member

    In one of the cases, assessee has purchased a house in Bangalore by taking loan. He has given that house on rent and staying in another rented house in the same city since the own house is far away from the work place. In this case whether the assessee is eligible to claim HRA deduction ? Also kindly let me know whether he can claim full deduction of interest paid on the house loan from Income from house property or not.

    Thank you.
     
  2. ZED

    ZED Well-Known Member

    Yes , if the conditions mentioned below are satisfied.

    For the rented property?
    Yes, he can claim entire amount as deduction because the restriction of 200,000 u/s 24(b) is for self occupied property and not for let out property.
    Further, for the purpose of the computation , assessee has the option to treat any of the property as self occupied. [Refer S.23 for more details]


    S.10(13A) any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee, to such extent as may be prescribed having regard to the area or place in which such accommodation is situate and other relevant considerations.

    Explanation.—For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply in a case where—

    (a) the residential accommodation occupied by the assessee is owned by him ; or

    (b) the assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him ;
     
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