Can I save tax by buying a house in my hometown under the New Tax Regime?

Two types of deductions/adjustments are allowed for a let-out property in the new tax regime:

First, a flat 30% standard deduction from the total rent received after deducting municipal taxes is allowed. So, whatever rent you receive in a year, first reduce the municipal tax paid in the financial year. On the balance, you can claim a 30% deduction, regardless of the amount you might have spent on repairs or maintenance of the property.

Second, the interest paid on a housing loan for a let-out property can be adjusted against the rent received under the Head "Income from House Property". However, you cannot set off the interest on let-out property against other heads of income income such as income from salary or business income. It can be set off only against the rent received. Moreover, you cannot carry forward any loss from house property in the new tax regime.

How will it be calculated?

Suppose your annual rent from the let-out property is ₹3 lakh, housing loan interest is ₹4 lakh, and municipal tax paid is ₹7000.

Can you claim HRA for the rent paid at your actual place of residence?

Suppose you have a let-out house in your hometown, but you are currently living in another city for a job/business, etc. In this case, you cannot claim House Rent Allowance (HRA) under the new tax regime. HRA is allowed only under the old regime.