Would I be able to claim Tax Benefit for both HRA and Home Loan? – An inquiry which is frequently posed by numerous taxpayers. This is essentially in light of the fact that numerous businesses don't permit both tax benefits together in specific circumstances. Tragically, this isn't the best activity.
Both HRA and Home Loan Interest tax sections are unrelated. You claim tax benefit on HRA (House Rent Allowance) under section 10(13A) while the tax benefit on payment of interest on home loan comes under section 24(b). However, there can be issues if both the sections are used together with the intent of tax evasion.
- We can have four circumstances for individuals claiming HRA and Home Loan tax benefit.
- A rented house instead of employment and own house in a different city
3.Own level in the city of employment and stay in a rented house in a similar city
- Own level in the city of employment and stay with parents/kin in a similar city and pay the rent a rented house in a different city and own house at the work environment
DownloadAutomated Income Tax Revised Form 16 Part B for the Financial Year 2019-20& Assessment Year 2020-21 [ This Excel Utility Can Prepare At a time 100 Employees Form 16 Part B in Revised Format ]
1. A rented house instead of employment and own house in a different city
This is extremely simple to deal with. You can without much of a stretch claim tax benefit on both and NO business has an issue with this plan.
2. Own level in the city of employment and stay in a rented house in a similar city
This is precarious. The primary intelligent inquiry which strikes a chord is the reason would any individual claiming a house in a similar city stay on rent? Most bosses have an issue with this game plan and may not give tax benefit on both HRA and Home Loan.
In any case, lawfully you can claim tax benefit on both in the event that you can give a substantial purpose behind this course of action. The reasons can be it's increasingly helpful to stay. For example, your level is on the edges with the practically unimportant open vehicle, you might not have any desire to live there and rather stay near your work environment. The other explanation could be the possessed house is littler for the size of the family. There are confusions that there ought to be a base separation between two houses. This is a legend! All you need real motivation to stay on rent.
DownloadAutomated Income Tax Revised Form 16 Part B for the Financial Year 2019-20& Assessment Year 2020-21 [ This Excel Utility Can Prepare At a time 50 Employees Form 16 Part B in Revised Format ]
Additionally, in the event that you move to your new possessed house in the budgetary year, it's a certified activity and you can claim HRA for the period you stayed on rent and house advance benefit for the whole year. In the event that your manager isn't prepared to give tax benefit on both – you can claim HRA tax benefit from the business and claim tax benefit on Home Loan while recording your Income Tax return.
The other inquiry is should the possessed house be expected to have notional rent? The appropriate response is No. In the event that you get genuine rent, at that point appear, at exactly that point you have to pay tax on that.
3. Own level in the city of employment and stay with parents/kin in a similar city and pay the rent
The circumstance is comparative as talked about above with the distinction being your landowner or proprietor is your nearby relative like parents/kin. Any such rental exchange is brimming with doubt thus you ought to be cautious in the event that you utilize this for tax sparing. You should do the accompanying:
1. Actually compensation the rent through Check/ECS and so forth and the recipient should give rent receipt for the equivalent.
2. The proprietor/woman should show this rent as "pay from house property" and pay taxes on the equivalent.
There have been situations, where rent paid to close family members, have been denied tax benefit by the personal tax division as there was NO proof of real exchange. So stay cautious
DownloadAutomated Income Tax Revised Form 16 Part A&B for the Financial Year2019-20 & Assessment Year 2020-21 [ This Excel Utility Can Prepare At a time 100 Employees Form 16 Part A&B in Revised Format ]
4. A rented house in a different city and own house at the work environment
Here might be where you have rented a spot where your life partner/parents stay (in a different city) while you own a house at the city of your employment and stay there. For this situation, you can't claim HRA tax benefit as HRA is paid for staying on rent with the end goal of employment. Be that as it may, you can without much of a stretch claim home advance tax benefit. Would you be able to Claim Tax Benefit on both HRA and Home Loan?
Download Automated Income Tax Preparation ExcelBased Software All in One for the Government and Non-Government (Private)Employees for the F.Y.2020-21, as per the New Income Tax Style New & OldTax Regime U/s 115BAC Passed in the Budget 2020
Feature of this Excel utility:-
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2) The Salary Structure have in this Excel Utility as per the Govt. and Non-Govt employees Salary Pattern
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4) Individual Salary Sheet
5) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2020-21
6) Automated Income Tax Revised Form 16 Part B for the F.Y.2020-21
7) All the amended Income Tax Section have in this Utility as per Budget 2020 and New Section 115 BAC for the F.Y.2020-21
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