Is home buying on your mind? Are you trying to work out your expenses post the addition of home loan? Of course, buying a home is a big decision. It involves a lot of calculations and planning. So, thinking about your HRA claim, home loan tax benefits are a part of the home buying process. Wondering if you can claim HRA & home loan benefit or both? If at all this is chasing you, then read on this handy guide, plan your expenses and make the dream of buying your own home, a reality.
One can claim tax benefit & HRA, under the following circumstances
If you have taken a home loan, but continue to live in a rented accommodation, then you can claim HRA exemption and deduction for home loan repayment. Provided, your job is in a different city and you have bought a house in another city. Alternatively, your house and work place are far, and commuting every day will be a challenge.
You buy a house, which is under construction and you continue to stay in the rented accommodation during the construction period. However, in this case, you can claim the home loan tax benefit only on the interest component of the loan and not the principal repayment. This claim can be made only after you get the possession of the house and in five equal installments over the years.
The other scenario is when you continue to live in a rented house and give your own home on rent, too. This can be because your own house is small, not meeting your family needs. But, in such a scenario you will have to disclose the rental income, which you earn as it will be part of the taxable income.
So, you can make both the claims, only under the above circumstances. Now, let’s learn about the details regarding the Income Tax exemption acts. HRA exemption can be claimed under Section 10 (13A) of the Income Tax Act of 1961. You can calculate this exemption, by taking the lowest value from the below three
- Actual HRA as received from the employer
- 50% of salary for employees living in metro and 40% in the case of non metro city
- Actual rent paid minus 10% of salary
In addition, a homeowner can make the claim in the below manner
- Exemption of HRA towards the rent payment
- Under section 24, deduction of home loan interest
- Under section 80C, the owner can claim principal repayment
Hope, this handy guide will come useful in planning your new home. You can make the necessary calculations and take a leap forward in buying your own home. It is advised to consult your financial advisor/ CA before taking the decision. If you are looking for that house, which you will love to call your home, then look for options by Valmark developer in Bangalore. Valmark developer has apartments in Bangalore from which you can view and select. You can also book an under construction project like Valmark CityVille and gain home loan and HRA benefit, until you get the possession. You can also plan the possession part by checking our project details uploaded on RERA. The RERA number of CityVille project is PRM/KA/RERA/1251/310/PR/171222/000914 and you can gather all details from Karnataka RERA website. Valmark is for transparency, it is to trust. Our proficient team will help you in home buying process, end to end, making your experience a truly memorable one.