Is claiming HRA and home loan benefits possible?

The income tax laws allow you to claim various tax benefits with respect to the house occupied by the assesses – whether it is owned by you or taken on rent.

Claiming HRA as well as home loan benefits

The law allows a tax payer to own more than one house property. However, he has to opt for only one property as self-occupied, if more than one such property is actually self-occupied. The law, hence, perceives that a person can have more than one self-occupied property, which are owned by him. By the same legal provision, it can be inferred that one can also have more than two houses in his occupation, even if all are not owned by him. So, in addition to the rented house occupied by the tax payer, he can have one more house property as self-occupied. There is no provisions in any of the Sections 80 C, 24(b) or Section 10(13A) (which provide for the tax benefits with respect to HRA and home loans) that restrict the claim of deduction to only either or any of the one and not both. The law believes in the possibility of one person occupying more than one house. This is confirmed by the changes proposed by the Finance Bill 2019 in the income tax laws, allowing one to have two houses as self-occupied houses, instead of one being allowed till now.

Since no such restriction is provided under the law and as the laws contemplate a situation where a person can own and occupy more than one house, in my opinion, one can legitimately claim both the benefits, as long as the conditions for claiming the benefits under the respective sections are complied with.

If the house property owned by the tax payer is in a city other than his place of work, there would not be any problem in claiming both the benefits simultaneously. However, if both the properties, one owned and the other one taken on rent, are in the same city, it may be logically difficult to establish that the tax payer is occupying both the houses. However, if the house owned by you is used by your parents/siblings and you are staying in a rented house, you can claim both the benefits, even if both the houses are situated in the same city.

The benefit should be claimed only in genuine cases and not for tax evasion. So, in case you have let out your own house and receive the rent in cash and have taken a house on rent, it is advised to refrain from misusing the provisions of the law, to evade the legitimate dues to the government. You can also claim both the benefits, if your house is let out and you are declaring the rent in your ITR and are paying rent for another accommodation.

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