Income tax return (ITR) tip: Save money, claim home rent and home loan benefits from taxman

Can I claim both home rent and home loan benefit for tax purposes? I have a home loan for my own house but now I want to shift to a flat closer to my office for which I will have to pay rent. Piyush Agarwal

Income-tax Act allows taxpayers to claim exemptions on investments made and expenditure incurred out of the total income. While exemptions on principal repayment of home loan can be claimed under Section 80C and interest payment can be claimed under section 24b, House Rent Allowance exemption can be claimed under section 10 (13A) of the Act.

If you have taken home loan for your house, but you live in another house on rent, you can claim tax benefits on both. However, if both houses are located in the same city, you will have to explain the reason behind not living in your own house to your employer or the tax authorities in case of any scrutiny. Like in your case, it is commute time or distance of the house from your office.

I did not file tax last year as I had just started working. This year can I file it for both years together? I have no tax to pay since I have only salary-Sahil Singh

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An individual is liable to file Income-tax return (ITR) where his total income liable to tax exceeds the basic amount not chargeable to tax, that is, Rs 2,50,000. Hence, in case your income is within the prescribed limit, there is no requirement for you to file Income Tax return.

By: Chirag Nangia

(Director, Nangia Advisors LLP)

Source: DNA Money