Saurabh (Software Engineer) 10 March 2011

Claiming for HRA for the house bought in co-ownership

Hi,

I bought a house with loan. The flat is in the co-ownership of my wife and me. My wife is housewife and has no other income source. I am the only person earning and has the loan against my name.

Now I have 2 queries:

1. Since loan is still under payment, Can I show HRA claim, showing that i am paying rent to my wife and also show that my wife is getting that rent amount and file return for her too

2. In case it is not possible when there is outstanding amount against the loan, if I pay complete loan amount and close the loan, can I do the thing mentioned in point-1

Thanking you in anticipation.

-Saurabh

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4 Replies

Saurabh (Software Engineer) 12 March 2011

Hello Experts,

Can you please reply...

Thanks

Legal Fighter (Advocate) 22 March 2011

no u can't show. u can't do it in both the cases.

CA VK Dwivedi (Job) 22 March 2011

Dear Surabh,

Let me clear you point blank Dual Benefit is Not allowed in the Income Tax Act. The Idea behing HRA is to give relief to those who are staying in Rented accomodation. You can not claim the benefit of HRA and Int. on housing loan at the same time. If you are very keen to do so then change your city where your house is situated then you will be allowed deduction on Interes/ Principal and HRA.

Even if you pay off you housing loan you will not be given benefit of HRA as long as your name is appearing as owner of the house.

Also, if you file you show payment of Rent to your wife which she bought even though she does not have any income. the provison of Clubbing may be attracted (Depends on the ITO how deeply he scrutinise your Return, if by chance your return is selected for scrutiny).

VK Dwivedi