|House Rent Allowance (HRA)|
|House Rent Allowance (HRA), is an amount which is paid by employers to employees
as a part of their salaries. This is basically done as it helps provide employees
with tax benefits towards the payment for accommodations every year.
|It is determined on the basis of your Salary & City of residence.|
|It is regulated by the provisions of Section 10(13)A.|
|Only Salaried employees can claim the benefits of HRA and only if the
Salaried person is living in rented Accommodation.
|In case you stay with your parents, you are eligible to pay rent to your parents and claim HRA.
But, in this case, you must have sufficient documents (Rent Receipt & transaction) as proof.
Note : This rule doesn’t allow you to pay rent to your spouse and claim HRA exemption.
|If your annual rent exceeds Rs. 1,00,000 – Landlord’s PAN card is mandatory to submit with employer.
In case, Landlord doesn’t have a Pan card, he/she can provide a self-declaration
(stating his Name, Property Address and Amount of Rent).
|Rent receipt is required if rent exceeds Rs. 3,000.|
|If you couldn’t submit documents (Rent receipts/declaration) to your employer, then also, you can claim the benefit of HRA while filing your ITR. And you need to keep it safe to produce when asked by IT deptt.|
|HOW TO CALCULATE HRA EXEMPTION :|
|Least of the Following is exempt :|
|1||Actual HRA Received|
|2||50% of Salary (If Residing in Metro City- Mumbai, Kolkata, Delhi, Chennai) OR 40% of Salary (If Residing in Non-Metro City)|
|3||Actual Rent Paid Less 10% of Basic Salary|
|For the Purpose of Calculation of HRA :|
|Salary means :|
|Basic Salary + DA (forming part of salary) + Commission Income (if based on, fixed %age of Turnover achieved)|
|Note :||For claimimg HRA, you should receive HRA as a Salary Component.|
|If you don’t receive HRA or you are a self-employed individual, you can claim Deduction U/S-80GG upto Rs. 60,000 per year.|