DEDUCTION OF INTEREST OR HRA

[manoj gupta]

A person owns a house at Ludhiana for the construction of which he has taken housing loan. He works at Chandigarh.He has taken a house at rent at chandigarh. From Monday to Friday he stays at Chandigarh in rented house and on Saturday and Sunday he comes to Ludhiana and stays at owned house. Now, can he claim deduction for HRA for rent paid for House at Ludhiana and at the same time deduction of interest on housing loan for House at Chandigarh. I think, the law is silent on this issue.

[sm surana]

Sir, you cant claim the both because if you are claim HRA than owned house is not self occupied. But a case is their to suppot you, th epossition is same & assessee win & claims the both. But as per law if you go by wording you cant claim, AO may allow only one then you have to go for appeal.

[Sandip tathe]

yes you can claim both.

[Surender Gupta]

Section 23(2) read with section 10(13A) and Rule 3, you can claim the benefit in respect of House at Ludhiana as self occupied property and HRA in respect of house at Chandigarh. The law is not salient on this issue, section 23(2)(b) specifically allows this benefit to you.

[Yash Gupta]

In my opinion , Since the person is staying at Chandigarh , the palce of his employemnet which happens to be away from Ludhiana where he owns a house property he can claim HRA relief u/s 10 (13A) read with Rule 2A and also interest benefit u/s 24 since: 1. The place of residence on account of employment is not Ludhiana. It is Chandigarh. 2. No benefit is derived from the house property at Ludiana aexcept for self occupation.

[DEV KUMAR KOTHARI]

I agree with Shri Surender Gupta, Shri Sandip tathe and Shri Yash Guota. However, please closely read all provisions as suggested by them and the circular of board about salary and TDS with your facts and then you can send final views of your for the benefit of readers. Further point for consideration can be: Where family members are residing? What is distance between two places? Take care of accounting for traveling expenses, the AO can try to bring them as undisclosed expenses if not accounted for/ not supported by drawings etc.

[Yash Gupta]

I fully agree with Mr. Kothari.

AI Summary

HRA vs Interest Deduction: concurrent claims possible where employment residence differs and owned house is self-occupied. Whether an employee may claim House Rent Allowance for a rented workplace residence while also claiming interest deduction on a housing loan for an owned house at another location depends on treating the owned house as self-occupied when employment requires residence elsewhere; commentators differ on whether both benefits may be claimed concurrently, and practical factors such as family residence, distance, documentary support for travel and accommodation, and assessing officer scrutiny are material.