House Rent Allowance (HRA) is generally considered as a part of the salaried persons and is generally added in the salary structure to help the individual to save taxes. House rent allowance conclusion is given under section 10(13A) of the Personal Income Tax Rules.
In the event that you stay in a rented house and get a HRA from your employer then you can claim partial exemption of House Rent Allowance on meeting the prescribed conditions:
1. What are the conditions to claim the House Rent Allowance(HRA) Derivation? The worker must satisfy the accompanying conditions to claim House Rent Allowance finding: The allowance must be specifically granted to the representative by his employer to meet expenditure actually incurred on payment of rent in respect of residential house involved by the assessee. The representative should not be the owner of the residential house involved by him. The worker must have actually incurred expenditure on payment of rent. It is necessary to have a relation of the representative and the employer.
2. Amount of Exemption in respect of House Rent Allowance is regulated by the rule2A. The least of coming up next is excluded from
Major Urban areas Mumbai, Delhi, Calcutta, Chennai Other Urban communities Allowance received Rent paid more than 10 per penny of salary 50 per penny of salary Allowance received Rent paid more than 10 per penny of salary 40 per penny of salary
Download Automated Income Tax Revised Form 16 Part B for the Financial Year 2019-20 and Assessment Year2020-21 [ This Excel Utility can prepare at a time 50 Employees Form 16 Part B]
3. How to calculate House Rent Allowance(HRA)? For registering HRA, salary means basic salary and incorporates dearness allowance, if the terms of work so provide. Salary shall exclude other allowances and perquisites.
Example: Mr A, who resides in Chennai, gets Rs. 6, 00,000 as a basic salary. He receives Rs. 1, 70,000 as house rent allowance (HRA). Rent paid by him is Rs. 1, 80,000. Discover the amount of exemption of house rent allowance.
Arrangement: The exemption will be worked out as follows: House rent allowance received for the year Rs. 1,70,000 half of salary Rs. 3,00,000 Rent paid less 10% of salary Rs. 1,20,000
HRA Calculator You can also register your HRA via this House Rent Allowance Calculator available on the official site of the Personal