Property tax query :: Business Line

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I am staying in a rented premises, paying a monthly rental of ₹10,000. But I don’t get HRA from my employer. Am I entitled to any tax benefit for payment of house rent, despite not getting HRA? My basic salary is ₹37400.

Haradhan Das

As per Section 80GG, where an assessee does not receive house rent allowance (HRA) from his employer and incurs expenditure on payment of rent, he may claim deduction of rent paid, subject to fulfilment of conditions prescribed. The deduction available under Section 80GG of the Act is limited to the lower of the following: expenditure incurred on rent, less 10 per cent of total income; or 25 per cent of total income; or ₹2,000 per month (₹24,000 per annum).

You may also note that no deduction is available under Section 80GG if the rent incurred by the assessee pertains to the house owned by him, his spouse or minor child, or by a HUF of which such assessee is a member at a place where he ordinarily resides or performs duties of his office or carries on his business of profession. It’s also not available if the assessee owns a self-occupied house at any other place whose annual value is nil.

A married woman has availed a housing loan for two houses. The first house is let out and the second house is neither let out nor self -occupied, since she is staying at her husband's house. Is she is entitled to a tax rebate on interest on the housing loan availed for the second house?

Abhirav Shetty

According to the provisions of income tax law, the annual value of a house or part of the house owned by the assessee shall be taken to be nil where such house property is in the occupation of the owner for the purposes of his own residence, or where the house property cannot actually be occupied by the owner by reason of his employment, business or profession carried on at any other place and he has to reside at that other place in a building not belonging to him.

Based on the understanding that your house property, which is lying vacant, does not fall in any of the above categories, the same shall be considered as deemed let out and taxed accordingly. For deemed to be let out house property, interest actually payable during the year can be claimed as deduction from the annual rental value of the house property, subject to other conditions as prescribed under the Act.