1. Can I take advantage, of tax benefits from Home Loan + HRA?                                                                           Yes, certainly we can enjoy the tax benefits of home loan with HRA, as there is no relationship between claiming HRA tax exemption & claiming interest on home loan as both have independent provisions in Income Tax Act.

2. If you have taken a home loan and still living in a rented place then you will be entitled to claim tax benefit of  both HRA as well as of Home loan? 

As for claiming HRA exemption, one should be living in a rented accommodation for which he should be paying rent. Further, if the home is ready to live in during financial year tax benefits of home loan can be claimed. Once the construction of home is complete, the HRA benefit stops.

Following benefits can be claimed:

  1. Tax benefit on principal repayment under Section 80C – Repayment of Housing Loan
  2. Tax benefit on interest payment under Section 24(a) & (b).
  3. HRA benefit.

 3. Can I claim tax benefit of HRA if I have my own house?  

No, one cannot enjoy the tax benefits of own house with HRA, as one cannot pay rent to oneself. Hence, whole of HRA received becomes taxable under “Income from Salary”.

4.      Can I avail tax benefit of HRA if I am living in the house of my parents?

In such a case, one will be entitled for HRA tax exemption, but the owner of the house who may be the parents is assessable for the rental income derived from the house, provided such transaction should be genuine & not with an intention to evade tax.

5.      Can I avail tax benefit of HRA if I am living in the house of my spouse?

As no commercial transactions can occur between Husband & wife, so tax benefits of such cannot be availed.

 6. Can I avail tax benefit of HRA + Home Loan, if my home is at considerable distance from work place?

Yes, one can claim tax benefits on home loan and HRA together & will be entitled to tax benefit on:

  • principal repayment under Section 80C
  • interest payment under Section 24
  • HRA benefit

However, it is necessary that some of our belongings must be at your home (the one you own) and you stay there on and off on weekends and holidays.
Despite this, if your employer does not agree and denies your tax benefits, you will have to claim it at the time of filing your tax returns.

7.      Can I avail tax benefit of HRA if I own a house in another city?

Yes, you will be availing tax benefits & will be entitled to HRA exemption if your house is in another city.

8.      Can I avail tax benefit of HRA if I have a house ready for occupation but cannot reside in it?

In this case, the Income Tax Act permits the individual to claim HRA and home loan benefits which includes both principal and interest repaid on the home loan, if you are residing in a rented apartment in the same city where your house is located for genuine purpose.

But, if your house is vacant then you still have to pay notional rent income. 

4 thoughts on “FAQ on HRA”

  1. I am living on rent in South Delhi, and paying rent of rs. 14000 per month;
    Recently (in July-2012) I purchased one 2bhk flat in Ghaziabad UP, and taken a loan of Rs. 20 Lacs. My per onth EMI is Rs. 20000. The said flat ready to move and due to my job location, i am unable to shift there in Ghaziabad.
    I am working in Gurgaon. (HARYANA).

    Can I get exemption both on Rent paid & Loan Interest including Principle?

    1. Hi,

      You can avail deduction u/s 24 (b) under Income from House property for payment of interest amount & deduction u/s 80C under Chapter VIA for payment of principal amount of loan but can not claim exemption on rent paid.

      Thanks and Regards,
      Team Taxmantra
      Call Us: +91 923 0033 070
      Email Us: info@taxmantra.com

  2. if my own house is occupied by my parents and i am living for rent, can avail both HRA and hiuse tax exemption. My parents are not paying me any rent.
    Please do advice me the

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