Confused About TDS Declaration: Can HRA and House Loan Deductions Coexist?

Hello, I am Sunil, an employee working in the Finance department. One of my colleagues declared TDS on my payroll software. He mentioned HRA under Sec 80GG, and at the same time, he mentioned a house loan under Sec 80C. Is it correct? Can you explain what I should do?

Being a finance person, you may not be aware of the IT sections.

Understanding Tax Sections

HRA comes under Section 10(13A). Housing loan principal payment falls under Section 80C.

I think his real problem is something else:

Can an Employee Claim HRA as Tax Exempt?

Can an employee claim HRA as tax exempt when he obviously has a house (for which he is claiming a deduction for a housing loan)? Sunil, you need to have detailed knowledge of income tax to be able to do this. Please check with your HOD or your auditor as to what the correct procedure is.

He can claim HRA as well as the House Loan Interest Amount since he/she must not have received possession of the house.

It is possible, but not in every case.

Considerations for Claiming HRA and House Loan Interest

Is he also showing income from the house for which he repays the housing loan? There is also a possibility that, like in his own house (for which he repays the housing loan), his dependents stay, and he and his wife are staying in another rented house nearby his workplace. Whatever the case is, the Commissioner of Income Tax should accept the same. Otherwise, IT will be collected with a penalty. It is the IT department's decision whether to accept or not when both HL and HRA are claimed.