Can you legally claim both HRA and home loan interest deduction in ITR? Here’s what income tax rules say

ITR Filing AY 2025-26: One common question most taxpayers grapple with every year when they file their income tax return (ITR) is if they can claim both House Rent Allowance (HRA) and home loan interest deduction benefits. So, the answer is ‘yes’, it is legally possible since many taxpayers live on rent and also pay a home loan.

So, if you are thinking that it is against the tax rules, the truth is that both HRA and home loan interest deductions can be claimed under certain conditions. In this article, we will explain in detail what the Income Tax Act says in this matter, in which situations both claims are valid and what things are important to keep in mind.

Today, the biggest dream of middle-class people is to buy their own house. But when it comes to filing Income Tax Return (ITR), only one question lingers in the mind: Can I claim tax exemption on HRA and deduction benefit on home loan interest in ITR?

The question is justified, because many people are paying a home loan on one hand, and on the other hand are living on rent due to office location or children’s schooling.

Also read: New ITR rules: Penalty up to 200% on claiming false deductions

So let us tell you clearly what the income tax rule says on this, and under what conditions both can be claimed.

Is it legal to claim both HRA and home loan interest deduction benefits?

Yes, you can claim tax benefits on both HRA and home loan in ITR, but it depends on certain conditions and documents. Also, it is possible only if you choose the old tax regime.

Deductions on HRA and home loan interest are not available in the new tax regime.

Under what conditions are both claims possible?

1. When you are working in another city

If you own a house in another city (say in Noida), and have a job in another city (say Mumbai) where you live on rent, then you can claim both deductions — both HRA and home loan interest.

2. When you live on rent in your own city

Sometimes it happens that the office is very far or you are not able to live in your own house due to traffic. In such a situation, you choose to live on rent. If you can give a valid reason for this, then both deductions can be taken.

3. When you have rented out your home

If you have rented out your home and are living on rent elsewhere (such as for investment purposes), you can still claim both.

Also read: ITR-2, ITR-3 utilities on hold: THESE taxpayers can’t file returns yet – Are you one of them?

Under which sections is the exemption available?

-Tax benefit Relevant section Maximum exemption

-HRA Section 10(13A) Depends on your salary to rent ratio

-Home loan interest Section 24(b) Rs 2 lakh (Self-occupied house)

-Principal amount Section 80C Rs 1.5 lakh

What documents are required?

For HRA: Rent receipt, rent agreement, landlord’s PAN number (if annual rent is more than Rs 1 lakh).

For home loan: Loan statement (with interest and principal details), sale deed and possession certificate.

What to keep in mind?

If you live in the same city and still claim both HRA and home loan, the department may get suspicious.

If the landlord is your parents and you have shown them the rent, then proof like PAN number and bank transaction is necessary.

The new ITR form now requires a lot of details – like the landlord’s name, PAN, and the rent period. So avoid fake claims.

What is available in which tax regime?

Summing up…

If you want to take exemption on both HRA and home loan to save tax, then choose the old tax regime.

The Income Tax Department needs proof, so keep all documents organized.

If your situation is a little complicated (like the house is in another city, but the rent is local), then definitely consult a chartered accountant once.