• Home loan and HRA

Hi,
 This is suresh from guntur, I have taken home loan(17 lakhs) in june2017 for apartment ,still it is under construction.distance between my residence( rented) and apartment is 9 kms .shall I claim both HRA and Home loan for exemption while filling the returns for 2017 to 2018 year. Kindly clarify me this.

Regards,
Suresh
Asked 4 months ago in Income Tax from Guntur, Andhra Pradesh
As the house is under construction you can claim HRA
Vidya Jain
CA, Kolkata
627 Answers
14 Consultations

4.8 on 5.0

Hi Suresh

You can claim HRA for your rented house as usual.

For under construction house, deduction for principal repayment shall not be available. Interest deduction for the construction period shall be available in 5 equal annual installments starting from the year of completion.

So, for FY 17-18, no deduction can be claimed in respect of home loan.
Lakshita Bhandari
CA, Mumbai
2177 Answers
71 Consultations

5.0 on 5.0

Hi Suresh,

You are eligible to claim HRA deduction in the current year.

With respect to interest deduction on home loan, you are not eligible to claim that. You can claim interest deduction only after completion of the house. The interest paid during under construction period can be claimed in fie installments starting from the year in which house is costructed.
Abhishek Dugar
CA, Mumbai
3578 Answers
161 Consultations

5.0 on 5.0

Hi Suresh,

Hope you are doing well!

Yes, you can claim HRA but no deduction can be claimed for home loan for FY 2017-18.

Also, you can claim pre period interest i.e under construction periods in 5 equal installments starting from the period of completion. But no deduction shall be allowed for principal repayment.

Thanks & Regards,
Payal Chhajed
Payal Chhajed
CA, Mumbai
981 Answers
8 Consultations

4.8 on 5.0

Interest paid on a home loan can only be claimed once you have taken the possession. It doesn't matter whether it is close or far away from your rented place.

Once it is ready, the interest paid until the financial year prior to the year in which you move (say you move on 31 July 2019, then interest paid for 2017 and 2018) to the new flat will be available in 5 equal instalments along with the current interest that you pay year on year. Effectively, the total interest in any year should not exceed Rs 2,00,000, including 1/5the of the prior period total interest (2017 + 2018 as mentioned above). 

Right now you can continue to claim HRA. Even if you want to continue to stay in the rented home after completion of your flat, for whatever reason, you can claim HRA and interest, both of them, but you will have to show some rent on your flat, which I hope you will let out rather than leaving it vacant. You are a better judge when it comes to staying in your apartment or at a rented place close to your place of work.
Amit Kumar Narula
CA, Bangalore
59 Answers

5.0 on 5.0

Hello

You can claim HRA for rented house .
Housing loan repayment deduction is available after completion only.Since apartment is under construction so deduction for home loan will not be available for FY 17-18,but interest paid in these period will be available for deduction after completion and can be claimed in 5 yrs.(5 equal installments)

Hope it suffice.
Swati Agrawal
CA, Indore
680 Answers
1 Consultation

5.0 on 5.0

Hi Suresh,

Since your house is currently under construction, you can claim the HRA for the rented house. For the under construction house, you can claim the pre- construction interest in 5 equal installments starting the year in which you get possession. For the FY 2017-18, you will not be able to claim any deductions.

You can call me for further clarifications.

Regards,
Nikhil
Nikhil Khanna
CA, Mumbai
1375 Answers
17 Consultations

5.0 on 5.0

Hi Suresh,

Yes, you may claim both HRA and home loan deduction. However, you can claim the home loan deduction only once the house is fully constructed. The interest paid for the pre-construction period shall be allowed from the year when the construction is complete and it will be allowed in 5 installments.

Thanks
Damini
Damini Agarwal
CA, Bengaluru
269 Answers
13 Consultations

5.0 on 5.0

Dear Sir,

Yes you can claim both interest on home loan and HRA simultaneously if there is valid proof that property is under construction and there is valid rent agreement with the landlord.

Thanks
Vivek Kumar Arora
CA, Delhi
1624 Answers
48 Consultations

5.0 on 5.0

Home Loan deduction can't be claim unless construction is completed, hence for FY 2017-18 you can claim HRA as per income tax rules if you are paying rent.
Varun Chawla
CA, Ghaziabad
72 Answers

5.0 on 5.0

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