Possible to claim both HRA exemption and adjustment of negative income from house property?

www.Thetaxtalk.com

 1,031 total views

I am working in Mumbai and pay rent for ahouse which i have currently occupied. I want to purchase a house in Chennai forthe residential accommodation of my dependent mother. The house in Chennai willbe finance by taking loan from HDFC. Is it possible to claim both HRA exemptionand adjustment of negative income from house property?

Exemption under section 10(13A) is available if a taxpayer gets house rent allowance and pays rent for getting a residential accommodation for himself and his family. If rent paid by him is more than 10 percent of salary, the house rent allowance is wholly or partly exempt from tax. To claim exemption under section 10(13A), there is no requirement that in the case noted above, the taxpayer should not own a house in the same city in which he is residing or in some other city.

If a person owns a property and it is self –occupied, he can claim the deduction given by section 24(b) in respect of interest on capital borrowed for the purpose of financing purchase construction, reconstruction, repairs or renewal of house property. The maximum amount of deduction is Rs.150000. As the annual value in such a case is zero, the interest deductible upto Rs. 150000 becomes negative income from self-occupied property. In such a case, the owner and/ or any of his family members may occupy the property. There is no additional requirement that the owner should not claim any exemption under section 10(13A). Further, there is no such requirement that a person getting house rent allowance and claiming exemption under section 10(13A) cannot occupy a property (owned by the taxpayer himself) for the residential purpose of his family members. Consequently, the negative income from your Chennai property can be adjusted against your salary income or any other income, salary income will be calculated after claiming exemption inder section10(13A).

Leave a Comment

Your email address will not be published.

the taxtalk

online portal for tax news, update, judgment, article, circular, income tax, gst, notification Simplifying the tax and tax laws is the main motto of the team tax talk, solving