Deepak Thukral
Manager Accounts
Ramargha
Service
Pinax
Service
+1 Other

Hi

I am new to the forum. I have a home loan versus HRA clain tax benefit query as follows

1. Me & my wife have taken a home loan from a Bank for a property in Noida. The loan is on joint name ( both being co-applicants).

While my wife claims home loan taxation benefit as per the annual EMI / prepayment ( interest + principal components).

The amount she typically pays as EMI is INR 12.5 K per month & another INR 1.5 lacs per year is the prepayment done by her.

All these payments, whether EMI or prepayment are done by her ( i.e cheque payment is made by my wife ).

2. Now, my wife claims HRA also for a house rented in Delhi.

3. I claim an HRA for another house rented in Delhi

4. We want to increase the EMI amount to INR 25K per month and now, in addition to her, even I want to claim home loan taxation benefit.

I need to know the following

1. Can I claim both HRA & homeloan benefit together as my wife is also claiming

2. In case yes, do we just split the benefit 50% each based on statement from bank or do I get the benefit proportionate to my EMI payments.

3. In case this is permissible under certain conditions or declarations, what are those conditions or declarations.

My work place is in Noida.

Kindly help with expert opinion on this

Regards

Pinaki
Dear Pinaki,
Though both of u are co-applicants, u are equally entitled to claim benefits under income from house property. the maximum limit is Rs.150000. Since ur wif is making all the payments , ur wife is entitlr\ed to claim the benefits.
I.T. act is silent on claiming both the benefits. Suppose u bought a house in Dwarka & place of workk is Noida, and u are residing at Noida, then u can claim both the benefits. Only one member can claim the benefits of HRA.
Regards
Argha
Thanks Argha.

Only thing is that my office says that if my property was in Delhi or Gurgaon but HRA recpt was for Noida ( with work place also being in Noida), then it would have been permissible, as I could make a declaration that due to business compulsion or employment reasons, I need to stay in Noida though my property was in Delhi.

But, in my case it is reverse. The property & work place are in Noida while HRA is claimed on Delhi address. The Finance dept says that a declaration that due to personal convenience I need to stay in Delhi is unacceptable to IT dept.

So, there is some confusion between " business compulsion / employment reasons " versus " personal convenience". It looks like IT accepts only the business reason.

Also, they advice that I can claim loan benefit for Noida property also provided I consider it to have a deemed rental value . Which means, say I am already claiming HRA for a delhi acco. For Noida property I claim home loan benefir. In addition, I also need to pay taxes for Noida property's deemed rental as per municipal valuation. In other words, I can not enjoy best of both worlds.
SINCE THE HOUSING LOAN HAS BEEN AVAILED BY YOU AND YOUR WIFE, BOTH ARE ENTITILED TO CLAIM REBATE ON ACCOUNT OF REPAYMENT OF PRINCIPAL AND INTEREST SUBJECT TO STATUTORY LIMITS, PROVIDED THE REPAYMENTS ARE MADE BY BOTH. SINCE YOU WIFE IS MAKING THE PAYMENT, YOU SHOULD MAKE THE PAYMENT TO YOUR WIFE OF THE 50 PER CENT AMOUNT OF INSTALLMENT BEFORE SHE MAKES THE PAYMENT OF THE MONTHLY INSTALLMENT. FOR CLAIMING REBATE YOU SHOULD OBTAIN THE REPAYMENT CERTIFICATE INDICATING REPAYMENT OF PRINCIPAL AND INTEREST FROM THE CONCERNED BANK.

50 PER CENT OF THE PRINCIPAL YOU CAN CLAIM UNDER SECTION 80C AND 50 PER CENT OF THE PRINCIPAL YOUR WIFE CAN CLAIM. SIMILARY 50 PER OF THE INTEREST BOTH OF YOU CAN CLAIM ON ACCOUNT OF INTERST. I MAY POINT OUT THAT IF THE HOUSE IN QUESTION IS NOT OCCUPIED BY YOU INTEREST UP TO ANY AMOUNT IS ADMISSIBLE AS DEDUCTION. BUT IF THE HOUSE IS OCCUPIED WHOLLY OR PARTLY BY YOU THE INTEREST UP TO RS.1.50 LAC IS ADMISSBILE. FURTHER PLEASE NOTE THE INCOME OF THE SAID HOUSE SHALL BE CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IF THE HOUSE IS SELF OCCUPIED THE INCOME FROM THE HOUSE UNDER THE HEAD HOUSE PROPERTY WILL BE NILL. IN SUCH A CASE THE HRA RECEIVED BY YOU AND YOUR WIFE SHALL NOT BE EXEMPTED AND WILL BE INCLUDED IN YOUR INCOME AND T AXED UNDER THE HEAD INCOME FROM SALARIES.

DEEPAK THUKRAL

CHANDIGARH
I think all the above comments answer your queries and previous thread also provides you an interesting situation in terms of 1.5l limit being waived-off.
As per my understanding, if you've a single house then whether occupied or not, 1.5l limit works with renatl value as nil, irrespective of what you earn from it.
Do visit my blog Pay Right Taxes, no more to understand how you can save more money by investing some in another small property. And if the blog helps you, do participate in the poll there:wink:.
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