POSTED BY July 3, 2014 8:51 am ONE COMMENTON
In August 2013, I had taken a home loan towards purchase of an under-construction property for which I am expected to get possession around November 2014.
The property is about 17 km away from my workplace within the same city. If I plan to have my family stay in the new construction and myself continue staying in my current rented accomodation, what would be the tax implications?
1. Can I continue to claim HRA for the rented accommodation under Section 10 (13A)?
2. Can I claim tax deduction towards interest paid for the loan under Section 24 B while still claiming HRA?
a) If yes, which among the following two methods is the right way of computing the deductible sum for FY 2014-15:
i. interest paid from Nov 2014 to Mar 2015 + 20% of (Interest paid from Aug 2013 to Oct 2014) , capped to Rs 1.5 Lacs
ii. interest paid from Apr 2014 to Mar 2015 + 20% of (Interest paid from Aug 2013 to Mar 2014) , capped to Rs 1.5 Lacs
b) If no, please elaborate on the kind of tax benefits I can claim under this section.