Double tax benefits: Can you claim both HRA and home loan repayments while filing ITR this year?

If you pay rent for one flat and EMIs for another, can you claim double tax benefits? The short and simple answer is: Yes, under the Old Tax Regime. But how do you do it? Let’s find out.

• Actual HRA received
• 50% of basic salary (people living in metro cities)
• 40% of basic salary (people living in non-metro cities)
• Actual rent paid minus 10% of basic salary

This exemption is available under Section 10(13A) of the Income Tax Act. It is aimed at helping salaried individuals reduce their tax liability under the old regime when they pay rent. But what happens if you’re also paying home loan EMIs for another house?

The Income Tax Act separately allows you to claim deductions on home loan repayments as well:

• Under Section 24(b) of the IT Act, you can claim up to ₹2 lakh per year for the interest you have paid on a home loan for a self-occupied property.
• Under Section 80C, you can claim up to ₹1.5 lakh per year for principal repayment of the home loan.

So, there is no rule saying that you can’t claim HRA just because you also own another property for which you pay EMIs.

When can you claim both benefits?

Many people in India live in rented houses and also have properties in other cities. This is especially true for salaried individuals who go out of their hometowns to live in a rented house, but also own a house for which they pay EMIs. There are many other situations when this can happen, like when one’s house is under construction or when one needs a bigger house in the same city and has put their own house on rent. Provided that all the claims are genuine, you can get double tax benefits if you pay rent as well as interest on a home loan.

Simply put, you can claim all three: the rent, the interest on the home loan and the principal repayment in the old regime.

So, if your employer has deducted more TDS from your salary because you have submitted a combined claim, you can claim the full eligible exemption and deductions at year-end by showing rent receipts and a home loan interest certificate from your bank. Remember to report rental income, if any, from the house for which you’re paying EMIs and interest, and use the correct ITR form as per your income sources.

If your claims are genuine and are verified by the IT department, you will get the applicable refund.