Conditions to Claim both HRA and Loan Interest

• You Work in a Different City: If you bought a house in one city (like Noida), but your job is in another city (like Mumbai), and you live there on rent, then you can claim both HRA and home loan benefits.

• You Live on Rent in Same City: Sometimes, your own house is far from your office or not convenient to live in due to traffic or travel time. So, you choose to stay in a rented place nearby. If you have a genuine reason and can explain it, you can claim both benefits.

• You Rented Your House: If you have given your house on rent to someone else for investment purposes, but you are living in a rented place yourself, then you can also claim both HRA and home loan deductions.

Required Documents For HRA Claim

• Rent receipts
• Rent agreement
• Landlord’s PAN (if rent is more than Rs 1 lakh in a year)

Required Documents For Home Loan Claim

• Home loan statement (Including interest and principal paid details)
• Sale deed (proof you bought the house)
• Possession letter or completion certificate

Which Sections to Use for these Exemptions

Important Things to Keep in Mind

• If you are residing in the same city and claim both HRA and home loan, the income tax department might start keeping an eye on you.

• The Income Tax Department requires you to submit detailed proof for claiming deductions, so make sure you have all the necessary documents.

• The tax benefit on HRA and Home loan interest (for self-occupied property) is available only in the old tax regime, but not in the new tax regime. Therefore, choose the old tax regime if you want to claim exemption on both HRA and home loan.

• The tax exemption on Home loan interest (Let-Out property) is available in both the tax regimes; however, the exemption on principal repayment of home loan (under section 80C) is only available under the old tax regime.

• The new ITR form includes many details, which you must fill such as the landlord’s name, PAN, and the rent period. Therefore, do not even think of claiming deductions, as you will get into legal issues.

• If the landlord is your parent but you still pay them rent, then you must submit the proof of payment (bank transaction) along with your parent’s PAN number.