Let’s understand this with an Illustration:


I live in a rented house and my company provides me HRA for which I get some exemption for the payment of rent. Now suppose I have purchased a new house, so can I give it on rent and still claim the HRA exemption.

This means that on the one side, I would be paying rent and on the other side, I would be receiving the rent. Someone advised me that if I own a house then I cannot claim HRA, Is that true?



The HRA exemption can be claimed for the rent you have paid for the house you live in.Owning another house does not mean that you cannot  claim HRA deduction. The confusion arises because there is another section in the Income Tax Act i.e. Section 80GG, which is deduction on the rent paid.

It is Section 80GG that restrains the assessee from owning a house at a place where he resides and performs his employment duties.

There are certain conditions under which benefit of this section can be claimed in spite of owning a house. (Section 80GG is not available in case you are getting HRA from your employer). In any case, you may certainly claim HRA exemption and own the house.