Can I get any tax benefits for purchase of a house even if I don’t live there? If yes, will I have to forego the exemption benefit of HRA which I am currently getting?
- Name withheld on request
A general confusion among salaried people is whether they will have to forego the exemption benefit of House Rent Allowance (HRA) received from their employer to claim a deduction of interest on their home loan.
Since you are currently claiming the tax exemption for HRA, you must have opted for the old tax regime.
When a taxpayer owns a house property in respect of which he services a home loan but resides in a different city owing to work or any other justifiable reason, he may be entitled to claim the following benefits in Income Tax under the old tax regime:
i) Tax exemption basis section 10(13A) of Income Tax Tact for rent paid against HRA received from his employer
ii) Deduction from taxable income (up to ₹2 lakh a year) under section 24(b) of the Income Tax Act for interest paid on the home loan of the owned property
iii) Deduction from taxable income (up to ₹1.5 lakh a year) under section 80C of the Income Tax Act for principal repayment of the home loan for the owned property
However, none of the above benefits is available if a person has opted for the new tax regime introduced in the financial year 2020-21.
(Query answered by Amit Bhachawat, CFO, India Mortgage Guarantee Corp. If you have any personal finance queries, write to mintmoney@livemint.com to get them answered by experts.)
