Yes, it is possible to claim tax benefit on both HRA & Home Loan. In case, if you are living on rent and paying the home loan on another property in the same city then you are able to claim tax on both house rent allowance and on a home loan. However, the income tax department will monitor the values on which you will get tax benefits.
Possible conditions when you can claim benefits on both HRA and Home loan
When your home is under construction
If you are the one who has taken a home loan and your home is under construction then you can claim tax benefits on HRA. At the time when the construction of the home completes, then you will get tax benefits on the amount of interest paid till now. Get the benefits of tax exemption under section 10(13A).
If you own a home in any other city
This is the situation when you are able to get tax benefits on HRA as well as on the interest paid on the home loan. Let us understand it clearly with an example- suppose Yashu doesn’t have own home and she is living in an apartment in Delhi on rent, however, Yashu has bought a property in Gurgaon. To buy this property, she has a home loan. In such particular case, she is able to get tax benefits on both HRA and on interest on the home loan principal.
If you own a home but you are unable to move in
If you own a home but you are unable to live in your home. However, there can be multiple of reasons why you are living in another home on rent such as your workplace is in another city or any other. In this case, you are able to get tax benefits on HRA and on the interest repaid on a home loan. While there is the case which you need to fulfill. Under this condition, the distance between your home and workplace should be at least 35 KMs.
When you rent your own home although you reside in a rented home
Tax benfit claim on both HRA and Home loan
If you had purchased your own home but you had decided to live in a rented home. In such a case, you are eligible to claim tax benefits on HRA and on the interest paid against your rented home loan.
Note: In such a case, you will be able to claim the tax benefits under section 80C.
These are the various cases on which you will get tax benefits on both HRA and on home loan interest paid against your home.