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 : 95) Post Your Comments
1. how can i avoid TDS when i will pay rent to joint owner Rs.42000 per month .
shubhadeep maiti (Posted: Jan 16, 2015)
2. Kindly let me know H.R. DEDUCTION
I.D.SHARMA (Posted: Jan 6, 2015)
3. i am getting basic salary of rs. 19950 and hra of 1050/ per month i am paying monthly rent of 4300/ ple. let me know how much tax exemption i can claim .
rohit n desai (Posted: Jul 21, 2014)
Show All Comments
 Select a product:

 Select a product:

An insight into the era of teaser loans
7 most common Home Loan problems faced by...
Factors to Evaluate before opting for Home...
Paying back home loans: Which repayment...
Factors affecting eligibility for home loans

intercast love marriage specialist ASTLOGER...
black magic -black magic revenge spells/ Specialist...
baglamukhi sabar mantra Specialist ASTLOGER...
+919878192648 zakas love problem solution baba ji in...
सरल उपाए love problem solution baba ji...
Amritsar Independent Escorts Services - 07837993301...

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
4 new Corp Excel E-lobbies set up Corporation Bank Jan 15, 2015
News Archive