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Conditions for HRA & Housing Loan Deduction

Posted @ April 8, 2015, 2:57 am under (Payroll Outsourcing & Taxation)

Exemption of HRA

 - The exemption of HRA is available U/s 10 (13A) of the Income Tax Act, 1956. According to Rule 2A of the Rules, the quantum of exemption allowable on account of grant of special allowance to meet expenditure on payment of rent shall be the least of the following:

  1.     Actual house rent allowance received from employer
  2.     Actual house rent paid minus 10% of basic salary
  3.     50% of basic salary if living in a metro or 40% of basic salary if living in a non-metro
Deduction of loss from house property

While taking into account the loss from House Property, the employer shall ensure that the employee files the necessary declaration along with a computation of such loss from house property. In case of Self occupied property Certificate of repayment from Bank or Institution is generally obtained. 
Following details may be obtained and kept by the employer in respect of loss claimed under the head “ Income from house property” separately for each house property as per CBDT CIRCULAR NO : 08 /2013:
a) Gross annual rent/value
b) Municipal Taxes paid, if any
c) Deduction claimed for interest paid, if any
d) Other deductions claimed
e) Address of the property
f) Amount of loan, if any; and
g) Name and address of the lender (loan provider)

Conditions for claiming both HRA and Home Loan Deduction 


One has to fulfill either of following conditions to claim tax benefit for both - HRA exemption and deduction for repayment of home loan:


  • if the house one has bought and the house one live in are in different city.
  • The house one has bought is rented out.



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