I got possession of my house in June 2019 and moved there on 1st March 2020. Can I claim HRA benefit for rented House till February 2020 and tax benefits on housing loan interest simultaneously, for the same financial year? What about interest paid till I got possession of the house?
By Balwant Jain, Chief Editor, ApnaPaisa
There is no restriction in claiming simultaneous tax benefit for HRA and home loan for the same year.
For claiming HRA benefit you need to fulfill the condition that you should actually be paying rent for the residential accommodation occupied by you and which is not owned by you. HRA benefit is calculated for the period for which the rent is actually paid and not for the year as a whole. So you will be able to claim HRA benefit till you pay the rent for the rented house.
Likewise for claiming the interest under Section 24(b) you need to be paying interest on loan taken to buy that property which is owned by you and is in your possession. Please note that you will be able to claim the interest for whole of the year as there is no provision for allowance of proportionate interest under Section 24(b). So even if you have taken possession of the house on the last day of the financial year, you will still be able to claim interest for the full year.
In respect of the interest paid before you got the possession, the same is allowed to be claimed in five equal installments beginning from the year in which you take the possession. The aggregate of interest claim comprised of interest during construction period as well as for the current year is restricted to two lakh rupees in a year for self occupied property and the excess of interest over two lakh rupees will have to be ignored.
In case of let out property the full interest is allowed but loss under the house property is allowed to be set off against other income to the extent of two lakh rupees in a year and the loss not so set off is allowed to be carried forward and set off against the income under the head “Income from other Sources” for next eight years. So you will be able to claim HRA for 11 months. You will also be allowed to the interest for the year 2019-2020 and 1/5 of the aggregate interest paid till 31st March 2019 within the limit of ₹2 lakh as this is your self-occupied property.