Assessee claim deduction of Interest on Housing Loan to acquire house property u/s 24(b) and simultaneously HRA exemption on rent paid (if he resides in property other than acquired). Further upon sale of said property, interest already claimed as deduction u/s 24(b) can be added to cost of property for the purpose of computing capital gain.
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An assessee can claim a deduction of Interest on Housing loan taken to acquire a house property u/s 24(b) of the Income Tax Act. Section 10(13A) allows an assessee to claim HRA exemption in respect of rent paid for residential accommodation occupied by him. Further, where expenditure was incurred by way of interest on a loan is taken to acquire a house property, same shall be allowed to be added to cost for the purpose of computing capital gains upon sale of the said property.
The question under consideration is whether an assessee can claim all the aforementioned benefits together. Or to be more precise does avail of one the benefit, precludes assessee from claiming other benefits.
HRA Exemption U/s 10(13A):- Download Automatic H.R.A. Calculator U/s 10(13A)
Explanation to section 10(13A) provides that HRA exemptions shall be available if both the conditions are satisfied :
(a) the residential accommodation occupied by the assessee is not owned by him ; and
(b) the assessee has actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him
Deduction for interest as per Section 24(b): Max limits Rs. 2 Lakh.