I live in a rented house. However, I have taken a home loan for a home bought in my home state. Can I claim both HRA and home loan tax benefits?
In case you have purchased a residential property on loan, but you live in another home which you pay rent for, you can claim available tax benefit for HRA as well as against the Home Loan. The condition, however, is that both rented and owned property should be in different cities.
You also have to furnish the reason for not living in your own home, which can be job location being different from home location, long distance from home to office, a transfer from home location to another city and others, as long as it is reasonable.
New Home Under-Construction And Living In Rented Home
This may be one of the most common scenarios, as you may have taken home on loan for a residential project which is under construction, so you live in a rented home till your own home is completed. In such a case, one can claim the benefit of both Home Loan tax deduction benefit.
The caveat though is that a claim can be made only for interest repayment and post possession of house you are allowed to get such deductions in 5 equal instalments in the next 5 years after completion. You are not allowed to claim a deduction against principal repayment in such case. HRA can be claimed until completion as per your city and salary breakup as stated above.
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