Hi, I own a house and reside on the same and claim home loan principal and interest benefit. Due to transfer I would have to work (in same city as my own house) in an office 20 kms away from my current owned house. In case I wish to shift to a rented accommodation close to my new work place, 1. Can I claim HRA and Home loan principal and interest? 2. I read the same is possible provided a proper justification is provided to IT / employer, in such a case, is my reason (distance) mentioned justifiable? 3. I would let out my current house on rent, of course I would have to add the rent proceeds to my taxable income, however, what all deductions can I claim? Can i claim the monthly maintenance paid as deduction? Kindly advice me on the same Thanks Dhruv
Dear Dhruv,
Please find the response below:
1. Yes, you can claim HRA and home loan principal and interest
2. In my opinion, this is a justifiable reason.
3. You will get standard deduction of 30% from your rental income. Apart form it you will get the dedcution of municipal taxes actually paid. you cant claim the maintenance separately, its subsumed in 30% standard deduction.
Please feel free to call/revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Hi Dhruv
Yes you are right ,you can claim HRA and can let out your owned house
monthly maintenance exp are not exp in both cases , in self occupied case this is your drawings and in let out case 30% adobe deduction allowed irrespective whether you incurred exp or not.
Hi,
1. Yes. You can claim both HRA & Home Loan Principal & Interest Tax benefits. Make sure you have valid Rent Agreement and you pay the Rent preferably by any mode other than cash.
2. Distance of 20 kms + Traffic is a good enough reason in my opinion
3. Yes. You will have to show Rent as Income. You can deduct BBMP Property Tax from the Rental Income. There is a 30% Standard Deduction on Net Annual Value (Rent less Property Tax). You can also claim the entire Interest on Housing Loan as Deduction
1 Yes, you may claim. It is allowed.
2. The distance is a justifiable reason for you to shift to a rented accommodation close to your new work place.
3 There is a standard deduction of 30% on the rental income. The payment of property tax and the interest on borrowings are also allowed as deductions from your rental income.
Hello Sir,
1. Yes you can claim HRA and Home loan benefits both.
2. Yes, your justification would stand in convincing the ITO.
3. Yes, you will have to offer the rental income to tax. The monthly maintenance cannot be claimed as deduction but you will get a standard deduction of 30% of your rental income. So out of every Rs.100/- received only Rs.70/- will be subject to tax.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Yes you can claim HRA and Home Loan principal and interest.
One house you need to show as rented out and declare rental income.
From the rental income you can claim a standard deduction of 30% i.e. if you are getting rental of 100000 then your taxable portion will be 70000 whether you make any repairs or maintenance or not. This is provided by the Income tax act. Apart from this you can claim Property tax paid. You can claim Housing loan interest .
Apart from the above no other deduction is allowed.
Monthly maintenance is not deductible.
Hi,
1) Yes ,you can claim.
2) yes, if the assessing officer ask for reason,you can justify your case.but as you will show your house as let out. then there will be no issues.
3) deduction you can claim from income from house property are
- muncipal taxes paid in that financial year.
- 30% standard deduction (which includes maintenance cost)
- home loan interest accured
Hello Dhruv,
1. Yes, you can claim both HRA and Housing loan benefits.
2. Yes, it can be justified.
3. You cannot claim the maintenance but yes, you will get a standard deduction of 30% on your rental income.
Regards
Keerthiga Padmanabhan
M.Com., CA, LLB
