I have a house in which I currently live with my family. I have taken a bank loan to purchase it. I have paid Rs. 142,000 during the FY 2012-13 towards housing loan interest. Further, my pre-construction interest is Rs. 1,10,000 and this is my first year of claiming the deduction for the interest. What is the limit of the deduction in my case?

- Ashish

As per section 24 of the Income-tax Act, 1961, the maximum allowable deduction of interest on housing loan, in case of a self occupied property is INR 150,000, subject to fulfillment of prescribed conditions. Accordingly, in your case you would be allowed to take a maximum deduction of INR 150,000 from your house property income, pertaining to interest payable by you on your housing loan including the pre-construction interest component.

My wife and I both share the payment of house rent amount every month. Can both of us claim deductions in our respective salaries?

- Kumar

As per the Income-tax law, House Rent Allowance (HRA) paid to an assessee by his employer to meet expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee, shall be exempt up to the prescribed limits. The following conditions have been attached for claiming this exemption:

(a) Residential accommodation occupied by the assessee is not owned by him; and

(b) assessee has actually incurred expenditure on payment of rent.

Hence, both of you can claim HRA exemption after considering the individual share of rent paid by each of you (up to the prescribed limits). There should be clear documentation with the landlord as to who is paying the rent & quantum thereof.

(The author is a practising chartered accountant)

Mail your queries to taxtalk@thehindu.co.in

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