The double tax benefit
A very common question: "I pay a home loan EMI but live in a rented flat. Can I claim both the home loan deduction and HRA?"
Yes — both are allowed together under the Old Regime, if you genuinely meet the conditions. Quick jargon: HRA shields part of your rent; Section 24b is the deduction for the interest portion of your home loan.
The two big numbers
HRA uses the least-of-three rule, while Section 24b allows up to ₹2 lakh interest on a self-occupied home (Source: Sections 10(13A) and 24(b), Income Tax Act).
| Benefit | Cap |
|---|---|
| HRA exemption | Least of three amounts |
| Home loan interest (24b) | ₹2,00,000 (self-occupied) |
| Home loan principal (80C) | Within ₹1.5 lakh basket |
Scenario 1: different cities
You own a house in Pune (paying EMI) but work and rent in Bengaluru. Claim HRA for Bengaluru rent and 24b/80C for the Pune loan. The most clear-cut case.
Scenario 2: same city, different location
You own a flat in Mumbai but rent another closer to work or large enough for your family. Allowed — keep a valid reason (distance, size) ready in case of a query.
Scenario 3: under-construction property
You pay EMI on an under-construction home and rent elsewhere. Claim HRA now; you cannot claim 24b interest until possession (you can claim principal under 80C).
Scenario 4: you rented out your own house
You own a house, let it out, and rent another to live in. Claim HRA for your rent; declare the rental income, and deduct the full home loan interest against it.
What you should do
- Match each benefit to your actual living and ownership situation.
- Keep both the rent paperwork and the loan interest certificate.
- Note a genuine reason if you rent in the same city as your own house.
Common mistake
Claiming 24b on an under-construction flat. Interest before possession is not allowed in the current year — it becomes pre-construction interest, claimable later in five instalments.
How LastMinute ITR helps
Claiming both is legal but often triggers automated scrutiny. LastMinute ITR structures your HRA and house property entries cleanly in your deductions and compares old vs new regime, since both benefits need the old regime. You file and e-verify on incometax.gov.in.