House rent comes under which section

HRA is covered under Salaried Employees who live in a Rented house can claim HRA to lower their taxes – partially or wholly. The decision of how much HRA needs to be paid is made by employer. Part of Salary is apportioned to HRA. 1. CONDITIONS FOR CLAIMING HRA EXEMPTION? – Salaried Individual only can claim HRA. (Self employed cannot claim HRA. However Self Employed can also claim deduction of Rent paid under Section 80GG of Income Tax Act 1961.) – Stay in Rented Accommodation (Not living in a self owned). – Rent paid exceeds 10% of Salary. – HRA is a part of Salary. (Can be seen in Form 16(B) Sr.no. 2 (e).) – Not paying rent to spouse. 2. HOW MUCH DEDUCTION CAN BE TAKEN? Deduction available is least of the following: i. Actual HRA Received. ii. 50% of (Basic salary + DA) for living in Metro Cities (40% for Non Metro Cities). iii. Actual Rent paid less 10% of Basic Salary + DA Let us understand with the help of some Examples below: 3. DOCUMENTATION IN CASE OF SUBMITTING PROOF TO EMPLOYER? 1st: Rent Receipt provided by the Landlord. Note: If Total Annual Rent paid is more than Rs. 1,00,000/- than Number of Landlord is Mandatorily to be mentioned. (If PAN Number is not provided by the Landlord then take a Declaration from the landlord of not holding the PAN Number). 2nd: Rent agreement should be furnished if demanded by the employer. 3rd: It is always advisable to pay rent by Cheque or by electronic payment mode. 4. Can Mr. XYZ claim HRA by paying rent to family members? YES...

• • • • • What is House Rent Allowance (HRA)? House Rent Allowance (HRA) is paid by an employer to employees as a part of their salary to meet the accommodation expenses. Salaried individuals who live in rental premises can claim exemption of House Rent Allowance u/s. 10(13A). Employees are required to submit the rent receipts to their employers to claim the tax benefit. The employers, in turn, will calculate exempt House Rent Allowance and deduct the same from the employee’s From FY 2020-21 onwards, House Rent Allowance Exemption is only available if an employee opts for the Old Tax Regime. HRA Exemption rules and Calculation The amount of Exempt HRA will be the least of the following amounts: • Actual House Rent Allowance received • Actual rent paid less than 10% of salary • 50% of salary if you live in a metro city/ 40% in case of a non-metro city (Here Salary includes – Basic Salary + Dearness Allowance) The House Rent Allowance calculation formula has been explained below with the help of an example: Let’s understand with an example: Raj works in a company in Ahmedabad. He lives in a rented flat. He pays INR. 15,000/month as rent. Following is his salary structure: Particulars Amount (In INR) Basic Salary 5,00,000 House Rent Allowance 1,75,000 25,000 Other Allowances 12,500 Gross Salary 6,15,000 Actual Rent Paid 1,80,000 The least of the following will be the exempt House Rent Allowance: • Actual House Rent Allowance = INR 1,75,000 • Actual Rent Paid (-) 10% of Basic ...

HRA – House Rent Allowance Last Updated -- March 13th, 2023 We all share the same thought process when it comes to HRA - Is staying with a family eligible for a house rent allowance exemption? House Rent Allowance (HRA) is an important part of an individual’s salary paid by their employers. It is provided to employees to meet their requirements for rented accommodation. Salaried individuals can claim an HRA exemption or HRA deduction to lower their tax rate either partially or entirely. However, if an individual is not residing in a rented residence, then the house rent allowance for them is fully taxable by the Income Tax Department. The HRA is exempt from taxation under Section 10 of the Income Tax Act of 1961, and there are two ways to claim it - partially or fully. Table of contents • • • • • • • • • • • • • What is House Rent Allowance (HRA)? House Rent Allowance (HRA) is an integral component of an individual employee’s salary. It is paid by the employer to their employees so that the latter can meet their rented accommodation needs in the city they are living and working. While filing ITR, an HRA applies to both self-employed and salaried individuals. For the salaried individual, HRA is accounted for under Section 10 (13A) of the At the same time, salaried individuals are not liable for HRA exemption under this section of the Income Tax Act. But, self-employed individuals are eligible and can also claim tax benefits under Section 80 GG of the Income Tax Act. HRA...

Table of Contents • • • • • • • • • • • • • • • • • HRA exemption HRA exemptions are allowed under the Income Tax (IT) Act. Section 10(13A) of the Act provides that a salaried person can claim tax benefits with respect to the house rent allowance from his employer, on fulfilment of certain conditions. Listed below are the conditions. All you want to know about Conditions for claiming HRA rebate under Section 10 (13A) Key conditions that ought to be fulfilled: • Only salaried individuals can claim deductions under this section. • The HRA should be a part of your salary package. • You should actually be living in a rented accommodation in the city where you work. • The deduction is available only for the period, during which the accommodation is occupied by the tax payer. • To claim the benefit, the tenant will have to provide proof of actual rent payment. See also: Can you claim HRA exemption limit The HRA exemption that a salaried person is eligible to receive, is the lowest of the following amounts according to Rule 2A of the IT Rules 1962: • The actual HRA you get; • 50% of your basic salary plus dearness allowance (DA), if you live in metro cities or 40% for non-metros; • Actual rent paid, minus 10% of your basic salary plus DA. See also: HRA calculation Delhi-based Rajat Ghai’s monthly basic salary is Rs 50,000 and he receives Rs 18,000 as HRA. For his rented home, he pays Rs 15,000 as monthly rent. In his case, the deduction will be the least of the three amounts: • 5...

Are you a working professional, landlord, or employee wondering about the House Rent Allowance (HRA) under Section 10 13A of the Income Tax Act? Well, you have come to the right place. In this blog, we will give you a comprehensive understanding of house rent allowance under Section 10 13A, its calculation, benefits, and how to claim HRA exemption while filing income tax returns. [ Employers can provide tax-saving HRA benefits to employees, helping both save on taxes.] HRA is a salary component provided by the employer to the employee to meet the expenses of renting a house. Section 10 13A of income tax act governs the rules for claiming HRA exemption. HRA is a common component in the salary package for employees, and it is beneficial for both the employer and employee. The employer gets tax benefits while the employee saves on taxes. This is eight Get a Quote Why is House Rent Allowance under Section 10 13A for working professionals, landlords, and employees important? HRA section 10 13A is crucial for both working professionals and landlords. For working professionals, it helps them save taxes and reduces their rental expenses. For landlords, income tax Section 10 13A is a deciding factor for tenants while looking for a rental property. As an employee, you should understand the HRA calculation to know how much HRA you can claim and how much tax you can save. What is House Rent Allowance under Section 10 13A? HRA is a salary component given to employees by the employer to...