Claim HRA and Home Loan Payment

Shailendra 1
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Dear Sir,

I bought a duplex in Vadodara in Feb-2014 and I am also working in the Same City. Currently I am staying in rented flat, Rent is 8000. My duplex is under construction. So far I have withdraw 5 Lacs out of my 20 Lacs home loan. I have started paying my EMI 19800 from May-2014, first three months(Feb, March and April) I paid only interest of 5 Lacs. I am expecting possession of my duplex in next April - 2015, so I will withdraw rest of my 15 Lacs during the current year. So how should I claim tax benefit on HRA as well as on Home Loan repayment?

I understand I can claim HRA for current FY 2014-15, but How much I can claim for Principal Amount? and How much I can claim for Interest Payment?

Total Amount I will pay Rs. 2,22,071, during FY 2014-15. Please advise.

hra-exemption home-loan-interest possession-year housing-loan
1 Answers

As possession would be received only in FY 2015-16, you cannot claim tax benefit for home loan principal and interest before that.

You can continue taking tax benefit for HRA before possession is taken. Once possession is done, you should not take HRA benefit.

Interest paid before possession year can be claimed in five equal instalments starting from possession year. e.g. if you paid 1 lakh interest before FY 2015-16, you can claim additional 20,000 per year from FY 2015-16. But max deduction would remain 1.5 lakhs only.

Pankaj Batra5212
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