To claim HRA deduction, one should be paying rent

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: completed. Note that the combined limit for pre-possession interest as well as the interest paid on the loan during the year of possession is Rs 1,50,000.

My question is with respect to exact figures of my HRA deduction. The following are the particulars —

The house property purchased is not rented out but I am staying at a different place for employment purposes. Interest on loan for the purchase of said house, say, Rs 1,50,000. HRA calculated as per the provisions of the Act, is say Rs 90,000. Salary is say Rs 10,00,000.

Is Rs 2,40,000 deductible from salary for the purpose of computation of TDS. Or is the interest on housing loan not allowed, since the house is not self-occupied?

—Rajesh Pillai

The HRA deduction does not depend upon whether you own a house or not. Rather it depends upon whether you pay rent for the premises that you stay in or not. So in your case, assuming the figures provided are accurate, the total deduction you will be entitled to would be Rs 2.40 lakh.

My son-in-law sends money to me from his NRI account frequently. I am a salaried employee. I would like to know whether the amount sent to me to my account is taxable either for me or for him. Is there any limit (per annum, etc) for sending such funds?

—Ravindra

Any amount sent by your son-in law to you will be fully tax-free for both you and him. This is as per the provisions of Sec 56 of the Indian Income Tax Act that exempts gifts between relatives. However, it would be advisable to record this transaction in writing. A simple offer by him (on paper) to you, mentioning your relationship and the amount of the gift and your acceptance thereof should be kept on file by the both of you.

If I become a foreign national and also obtain an overseas citizenship of India (OCI) then please clarify the following

Need I convert my present bank a/c to NRO, NRE or both?

What is the difference between NRO and NRE account?

Is there any change in the rate of interest on term deposit with the bank, as compared to the normal deposits done by me, as I am an Indian resident and Indian passport holder at the moment?

—S S Gupta