Can My Friend Claim Tax Benefits on a Home Loan for an Under-Construction Flat?

My friend has availed a Home Loan on an under-construction property in Bangalore. The flat is still under construction, and he is staying in a rented flat in Bangalore. Is he eligible for IT exemptions like HRA, Housing Loan Principal & Interest deduction? The property is neither self-occupied nor rented out; it is still under construction.

As per the Income Tax Act, exemption is allowed for a dwelling house. However, normally, once a person starts paying EMIs, people tend to take advantage and claim exemptions under sections 80C and 80D. Please remember, you have to choose either HRA exemption or housing loan exemption, not both.

Best regards,
Chandru
Bangalore

If one is away from their own house, they can avail both HRA and housing loan tax benefits. However, the income received from the rent of their own house shall be shown as income. In the case of the house being occupied by dependents, such as parents, one can still avail both.

Regards,
Pon