NEWS & ADVICE : HOME LOANS
Tax Deduction on HRA (House Rent Allowance)
By Neelima Shankar
Print    Email    RSS   

If you are a salaried person receiving house rent allowance (HRA) from your employer, you are entitled for a tax deduction under the Income Tax Act. The tax implications of the house rent allowance (HRA) seem to be a confusing factor for almost every person.

House rent allowance (HRA) is a grant given by the employer to the employee to meet the cost of renting a house. It is basically a part of the taxable salary of an individual and one receives it irrespective of the type of property he resides in. Whether one stays in the rented accommodation or resides in his own house, he will get the HRA if his employer chooses to offer the allowance.

HRA Deduction

The deductions on HRA are eligible under Section 10(13A) of the Income Tax Act and will depend on certain laws. An individual can claim an HRA exemption only if the following three conditions are satisfied:

  • An HRA allowance is received as part of the salary package.
  • If one is staying in a rented accommodation and paying rent for it.
  • The rent exceeds 10% of the salary.

But it should be noted that one cannot claim deduction for rent paid to spouse. The relationship between a husband and wife is not commercial in nature and therefore the rent paid to spouse is not considered by the income tax authorities. On the other hand, rent paid to the parents is eligible for exemption. If you stay with your parents and pay rent to them then you can claim for tax deductions. However you need to keep all your rent receipts since it is the only proof that you are paying rent. HRA exemptions are only available on submission of rent receipts or the rent agreement.

Another factor that effects the tax exemption is the place where you live. If one resides in a metro city, he is eligible for a deduction of up to 50% of the salary or else the deduction is 40%.


Page  | 12 |  
(Comments Posted : 96) Post Your Comments
1. I am working in a Private limited Company and my consolidated remuneration is Rs. 250000.00 PA.

I live in a rented House and I pay Rs. 4500.00 per month. How can I get Tax benefit on House Rent and under which section should I put the rent paid figure on ITR I form ?

Please help me.

Regards,
MARICHSELVAM A (Posted: Feb 11, 2015)
2. how can i avoid TDS when i will pay rent to joint owner Rs.42000 per month .
shubhadeep maiti (Posted: Jan 16, 2015)
3. Kindly let me know H.R. DEDUCTION
I.D.SHARMA (Posted: Jan 6, 2015)
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
12 point conduct checklist for bank and...
Get rid of your home loan faster
Pre-pay your home loan
Identify the cheapest home loan offer
Home Equity Loan: A shoulder you can bank...


just one call and solve your all problem...
VASHIKARAN SPECIALIST PANDIT JI IN uk +91-9501893254
Thane Call Girls {{08689885909,,}}'Ghansoli Call...
Call Girl In Dehradun /O97368-80614/ Escort Services...
Call Girl In Dehradun /O97368-80614/ Escort Services...
Call Girl In Dehradun /O97368-80614/ Escort Services...

NEWS THIS WEEK
Canara Bank earned a profit of 60%. Feb 6, 2015
New Branch of Laxmi Vilas bank at Vijayawada Jan 30, 2015
Home loan EMIs expected to drop down Jan 21, 2015
Corporation Bank received MSME banking excellence award 2014 Jan 19, 2015
Home loan rates set to fall, after reduction in repo rate Jan 16, 2015
News Archive