Q. I stay in rented accommodation in Pune. I am planning to buy a flat for my own use which is scheduled to be completed 2 years later. I currently claim the benefit of HRA (House Rent Allowance). I want to know whether I can claim a deduction for housing loan EMIs. Also, till when can I claim the HRA benefit if I buy a house.

A. In the case of purchase of under-construction flat, you can claim the deduction for EMIs paid in the pre-construction phase, starting the financial year in which the construction of the house is completed. However total interest that can be claimed cannot exceed the overall limit of Rs 2 lakh. The principal component can be claimed subject to a limit of Rs 1.5 lakh under section 80C starting the financial year in which construction of the house is completed. You can continue to claim HRA exemption so long as you are staying in rented accommodation. In cases where you cannot live in your own house, since it is away from your workplace or not as per your need or any other reason, you may be allowed to claim HRA while you still own a house. However, this runs the risk of being misused. You must have a genuine reason to live in rented accommodation and must be paying rent, having a proper rent agreement and must meet other conditions as may be specified.

The query is answered by Archit Gupta, Founder and CEO, ClearTax