Can I claim HRA and housing loan in the same city?

**Can I claim HRA and housing loan in the same city?**

One of the most common queries among salaried individuals is whether they can avail the benefits of both House Rent Allowance (HRA) and a housing loan in the same city. Let’s dive into the details and find out the answer.

**The Answer:**

Yes, it is possible to claim both HRA and a housing loan’s tax benefits simultaneously, even if you reside in the same city. However, several conditions need to be met to claim both these benefits.

To understand this better, let’s look at the eligibility criteria and conditions for availing HRA and housing loan tax benefits:

1.

Can I claim HRA if I own a house in the same city?

Yes, you can claim HRA even if you own a house in the same city, provided you are not residing in the owned house, and you are paying rent for a different accommodation.

2.

What are the conditions to claim HRA?

To claim HRA, you must be living in a rented house and paying rent for it. Additionally, HRA should be a part of your salary structure, and you cannot own any other house in the same city where you reside.

3.

Can I claim a deduction on a housing loan while staying in a rented house?

Yes, you can claim housing loan deductions under Section 24(b) and Section 80C while staying in a rented house, provided you satisfy the eligibility criteria for both HRA and housing loan benefits.

4.

In case I own a house in the same city but live in a rented house due to work reasons, can I claim both HRA and housing loan benefits?

Yes, if you own a house in the same city but live in a rented house due to the necessity of work, you can claim both HRA and housing loan benefits. However, there are certain conditions associated with it, such as not receiving any rental income from the owned house.

5.

Can I claim HRA if I receive a lease amount from my owned house in the same city?

No, if you receive a lease amount from your owned house in the same city where you live, you will not be eligible to claim HRA. HRA benefits are only applicable if you are paying rent for a different accommodation.

6.

Can I claim tax benefits on a second property if I live in a rented house?

Yes, you can claim tax benefits on a housing loan for a second property if you live in a rented house, subject to certain conditions and limitations.

7.

Can I claim both HRA and housing loan benefits if I rent out my owned house in the same city?

No, if you rent out your owned house in the same city where you live, you are not eligible to claim HRA. However, you can still claim tax benefits on the housing loan for the rented house if you fulfill the criteria.

8.

What is the maximum HRA exemption I can claim?

The maximum HRA exemption you can claim is the minimum of the following three amounts: the actual HRA received from your employer, 50% of your basic salary (for residents in metro cities) or 40% (for non-metro cities), and actual rent paid minus 10% of your basic salary.

9.

What are the tax benefits available on a housing loan?

Tax benefits on a housing loan include deductions on the principal amount (Section 80C) up to Rs. 1.5 lakh and the interest paid on the housing loan (Section 24(b)) up to Rs. 2 lakh (Rs. 3.5 lakh for affordable housing).

10.

Can I claim HRA if I live with my parents and pay them rent?

Yes, you can claim HRA if you live with your parents and pay them rent, provided they own the house you are staying in and have proper rental agreements in place.

11.

Can I claim HRA if I live in a shared accommodation?

Yes, you can claim HRA if you live in a shared accommodation and pay rent. However, you need to provide a proper rent agreement and show proof of rent payments to claim the HRA exemption.

12.

Is there any limit on the interest deduction for a housing loan?

Yes, the maximum limit for interest deduction on a housing loan is Rs. 2 lakh (Rs. 3.5 lakh for affordable housing) per year, even if you have multiple housing loans. Any interest paid above this limit cannot be claimed as a deduction.

These FAQs should give you a better understanding of the possibility to claim both HRA and a housing loan simultaneously, provided you satisfy the eligibility criteria and conditions associated with each benefit.

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