Calculate your House Rent Allowance (HRA) exemption know HRA exemption Calculation Formula and download HRA Calculator in excel format for easy calculation of exempt HRA Allowance out of Total HRA received by Salaried Assessee.
Employees generally receive a house rent allowance (HRA) from their employers. This is a part of the salary package, in accordance with the terms and conditions of employment. HRA is given to meet thse cost of a rented house taken by the employee for his stay.The Income Tax Act allows for deduction in respect of the HRA paid to employees. The exemption on HRA is covered under Section 10(13A) of the Income Tax Act and Rule 2A of the Income Tax Rules. It is to be noted that the entire HRA is not deductible. HRA is an allowance and is subject to income tax.
An employee can claim exemption on his House Rent Allowance (HRA) under the Income Tax Act if he stays in a rented house and is in receipt of HRA from his employer. In order to claim the deduction, an employee must actually pay rent for the house which he occupies.
The rented premises must not be owned by him. In case one stays in an own house, nothing is deductible and the entire amount of HRA received is subject to tax. As long as the rented house is not owned by the assessee, the exemption of HRA will be available up to the the minimum of the following three options:
1. Actual House Rent Allowance (HRA) received from your employer
2. Actual house rent paid by you minus 10% of your basic salary
3. 50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro
This minimum of above is allowed as income tax exemption on house rent allowance.
Salary here means basic salary which includes dearness allowance if the terms of employment provide for it, and commission based on a fixed percentage of turnover achieved by the employee. The deduction will be available only for the period during which the rented house is occupied by the employee and not for any period after that.
Page Contents
- Meaning of Salary for calculation the exemption of HRA
- Examples for calculation of exemption/deduction of HRA
- Frequently Asked Questions on House Rent Allowance (HRA):-
- 1. How is HRA accounted for in the case of a salaried individual and a self-employed professional?
- 2. What are the dependent factors in calculating HRA for the salaried individual?
- 3. Can I pay rent to my parents or spouse to avail HRA benefits?
- 4. Do I need to submit any proof for my HRA claim?
- 5. Can I simultaneously avail tax benefits on my home loan and HRA?
- EXTRACT OF RULE 2A OF INCOME TAX RULES I.E. HRA EXEMPTION RULES
Meaning of Salary for calculation the exemption of HRA
- Salary means (Basic + D.A + Commission based on fixed percentage on turnover).
- Salary is to be taken on due basis in respect of the period during which the period accommodation is occupied by the employee in the previous year.
Examples for calculation of exemption/deduction of HRA
X has received following amount during the previous year.
1. Basic Salary – Rs. (5000*12) – Rs. 60,000/-
2. Dearness Allowance (D.A) – Rs. (1000*12) – Rs. 12000/-
3. House Rent Allowance (H.R.A.) – Rs. (2000*12) – Rs. 24000/-
4. Actual Rent Paid – Rs.(2000*12) – Rs. 24000/-
Calculation
The minimum of the following amount shall be exempt
- Actual HRA received (2000*12) – Rs. 24000/-
- Rent Paid in excess of 10% of salary ( 24000-7200) – Rs. 16800
- 40% of Salary – Rs. 28800/-
Therefore, Rs. 16800 shall be exempt and the balance Rs. 7200 shall be included in gross salary.
Frequently Asked Questions on House Rent Allowance (HRA):-
1. How is HRA accounted for in the case of a salaried individual and a self-employed professional?
HRA (house rent allowance) is accounted for in the case of salaried people under Section 10 (13A) of Income Tax Act, 1961, in accordance with rule 2A of Income Tax Rules (HRA Exemption Rules). On the other hand, self-employed professionals cannot be considered for HRA exemption under this act, as they do not earn a salary. However, they can claim benefits on the house rent expenses incurred under section 80GG, which resembles section to 10(13A) but is subject to certain conditions.
2. What are the dependent factors in calculating HRA for the salaried individual?
When you are calculating HRA for tax exemption, you take into consideration four aspects which includes salary, HRA received, the actual rent paid and where you reside, i.e., if it is a metro or non-metro. If these aspects remain constant through the year, then tax exemption is calculated as a whole annually, if this is subject to change, as in a rent hike, pay hike or shift in residence etc., then it is calculated on a monthly basis. It is usually rare for all the values to remain constant in a financial year.
The place of residence is significant in HRA calculation as for a metro the tax exemption for HRA is 50% of the basic salary while for non-metros it is 40% of the basic salary. This holds true especially when you work at a metro and reside at a non-metro. In this case, your city of residence only will be considered for calculating your HRA.
3. Can I pay rent to my parents or spouse to avail HRA benefits?
You can pay rent to your parents, however, they need to pay tax on the same or account the same in calculating their taxable income.
On the other hand, you cannot pay rent to your spouse. In view of the relationship when you take up residence together, you are expected to do so and hence such a transaction does not bear merit under tax laws. Sham transactions can only spell trouble under scrutiny, so steer clear of these.
4. Do I need to submit any proof for my HRA claim?
You need to submit proof of rent paid through rent receipts, for which only two need to be submitted, one for the beginning of the year and one towards the end of the financial year. It should have a one rupee revenue stamp affixed with the signature of the person who has received the rent, along with other details such as the rented residence address, rent paid, name of the person who rents it etc.
5. Can I simultaneously avail tax benefits on my home loan and HRA?
The tax benefits for home loan and HRA are two separate entities and have no direct bearing on each other. As long as you are paying rent for an accommodation, you can claim tax benefits on the HRA component of your salary, while also availing tax benefits on your home loan. This could be the case if your own home is rented out or you work from another city etc.
EXTRACT OF RULE 2A OF INCOME TAX RULES I.E. HRA EXEMPTION RULES
[Limits for the purposes of section 10(13A) .
2A. The amount which is not to be included in the total income of an assessee in respect of the special allowance referred to in clause (13A) of section 10 shall be—
(a) the actual amount of such allowance received by the assessee in respect of the relevant period; or
(b) the amount by which the expenditure actually incurred by the assessee in payment of rent in respect of residential accommodation occupied by him exceeds one-tenth of the amount of salary due to the assessee in respect of the relevant period; or
(c) an amount equal to—
(i) where such accommodation is situate at Bombay, Calcutta, Delhi or Madras, one-half of the amount of salary due to the assessee in respect of the relevant period; and
(ii) where such accommodation is situate at any other place, two-fifth of the amount of salary due to the assessee in respect of the relevant period,]
whichever is the least.
Explanation : In this rule—
(i) “salary” shall have the meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule;
(ii) “relevant period” means the period during which the said accommodation was occupied by the assessee during the previous year.]
Image courtesy of Salvatore Vuono at FreeDigitalPhotos.net
(Republished with amendments)
Author Bio
Whether mumbai suburbs are part of Mumbai metro for cliaming 50 % HRA exemptions ???
If husband and wife have earning separately (equally) and have rented an accommodation. Can they split HRA exemption and show half – half ?
i want a format for hra deduction under section 10 13a
how much the persentage of hra exemption if i live in noia or ghazabad
ek employe apni patni k sath rahata h.lekin her sal hra pr tex seving k liye apni patni k nam ghar ki rent reciept lagata h.kya aisa rule h?kya uski patni ko house tex bharna chahiy kis niyam se .yadi vo rent tax nahi bharti h to koi aur kis trh kahan usk
I work in Chandigarh and living in a rented house in Chandigarh. I have bought a flat in Mohali (actually Greater Mohali, outers of Mohali around Kharar). The distance of my flat from office is approx. 15 Kms. The construction for my flat has completed and I have got possession in January 2012. But I am still living in my rented accomodation in Chandigarh and planned to occupy my flat after 2-3 months. I have the following questions:
1. Since Chandigarh, Mohali and Panchkula is considered a TriCity area – is mine the case valid for owning house in another city from the city where I am employed? That is can I claim tax exemption on principal repayment at the same time as I claim tax exemption on HRA?
2. My own flat is lying vacant for self occupation after 2-3 months and I do NOT own any other house/property. That is I own only one house property. So is my case considered as “deemed let out”? I read that only if an individual owns more than 1 houses, then additional houses are considered deemed let out even if not actually rented.
So the question is what is my liability for income from house property – 0 or the notional rent value as in deemed let out case?
3. The interest paid for home loan in current financial year is 165000 and 20% of pre construction interest paid is 11000. Can I claim tax exemption on complete 176000 (with no upper cap of 150000) because it is not a self occupied property? and if the rental income = 0 (because the house is lying vacant) can I claim exception on the complete interest figure 176000 (-0 rented income)?
4. I had booked/purchased the flat in March 2009 but got in transferred in my name now in March 2012 (after possession was offered by the builder). Can I claim under section 80C for the stamp duty and registration fees paid for transfer of house in my name? Why I in doubt here is that the provision says that one can claim this exemption under 80C in the year of purchase of house. I purchased/booked the house in March 2009 but paid for stamp duty and registration fees in March 2012 after the possession was offered in Dec 2011.
For computation of HRA, Vashi (Navi Mumbai) shall be considered as a Metro city or a Non-metro city? I think just like New Delhi, even it shall be considered as a Metro City. Request professionals to comment.
The Calculation of rent 10% minus basic is wrongly calculated .
Verify.
Sir I m central govt emp. my basic pay is
1. Basic Rs 406940/-
2. DA =Rs 207032/-
3. HRA received=Rs 40694/-
4. Actual house rent paid= Rs 60000/-
Is there any amount which can be exempted from from income tax. please calculate my ddo not giving any exemption.
I am a employee of govt. of Assam. I have received HRA Rs.17728/- yearly and I live in own my house. Shall I Income Tax rebate house rent same amount ?
plz tell me that iam residing in govt acommodation can i deducted my house loan from my income .
I STAY IN COMPANY ACCOMMODATION AND COMPANY DEDUCT HOUSE RENT RECOVER FROM MY SALARY. CAN I CLAIM UNDER SECTION 80 GG
I STAY IN COMPANY ACCOMMODATION AND COMPANY DEDUCT HOUSE RENT RECOVER FROM MY SALARY. CAN I CLAIM UNDER SECTION 80 GG
I STAY IN COMPANY ACCOMMODATION AND COMPANY DEDUCT HOUSE RENT RECOVER FROM MY SALARY. CAN I CLAIM UNDER SECTION 80 GG
This is nice site that is so helpful to every body. Hera is a doubt from my side. A govt. employee is claiming HRA and H/loan simultaneously saying that, he is residing in rental house and his own house was occupied by his parents. Own house is located in the vicinity of 15 kms.
Can he claim both in this instance. Kindly clarify thro mail.
Is PAN details of landlord compulsory for claiming HRA ?
Is PAN details of landlady compulsory for claiming HRA ?
I am a central government employee and residing in my wife’s house who is also acentral government employee in the same station. I have accomodated my dependent parents in a rented house in the same station. Is the rent paid by me, for my dependent parents, is eligible for claiming exemption?
Sir, I get monthly HRA due to own house in delhi and I have not income from own house and I also paid annualy MCD property tax. Please intimate ,Can I get any relief from MCD Property tax in income tax calculation from salay. Thanks
Sir, I get monthly HRA due to own house in delhi and I paid annualy MCD property tax. Please intimate ,Can I get any relief in income tax calculation from salay. Thanks
MY. TOTAL HRA IS 27600 &
MY BASIC PAY IS 160960 &
G.P IS 55200
& DA IS 105277….
WHAT IS MY HRA exemption? PLZ ANS I M CONFUSED,,,PLZ HELP
Sir,
My wife is teacher in DTE Of Edu. Reg. HRA exemption, my wife was submit rent agreement with rent receipt of 11 months between her name and my mother name. (1) Please advise me she was eligible for HRA exemption. (2) If eligible, what about the document required. (3) Owner was a window and get family pension of Rs. 8000/- and she was not having PAN Card/Electricity BIl/Water Bill etc. (4) Govt. official required all these document (necessary), please advise me these document are mandatory reg. tax exemption of HRA.
Thanks
my employer is asking me to produce rent agreement. but i donot have that. How can i claim for HRA rebate
i am a ap govt. employee my quiry is am i claim the maintainance and property tax amount towards my own house? kindly suggest in this regard
I m drwaing and disbursing officer. I want one clarification related to HRA Rebate.
If leave and license agreement is on Husband’s name and rent paid by both Husband and wife. then is it admissible to grant tax benefit to wife, as far as HRA rebate is concerned?
If tenant pays Maintenance charge of flat, can that be claimed alongwith Rent for HRA
can i submit original receipt along with my income tax details
In the IT exemption the original receipts required for submitting
I had a quiry…
A salaried person taken a Property in Kalyan and given on rent and he is living in Bhiwandi on Rent …..
Can he show both the benifits…….? do he had to show the income of the rent of Kalyan in the Gross income. show me the calculation…….
i am a central govt employee in m.e.s. presently posted at leh.here i draw special compensatory remote locality allowance@2000/- &special duty allowance @12.5% of bp.is there will be any tax benefit for the same while calculating income tax.
Hi,
i am software engineer, my company demanding landlord pan for the rent i pay 17000/-. landlord is not producing his pan and also he is residing in US from long time.
Please reply me the solution of this problem ASAP.
Also is this mandatory to give PAN of landlord for getting benefit of HRA? is this new ruling?
Thanks
Shikha
Hello sir, I have quick question wrt to HRA.
Can I pay rent to my Father? he is not a actual owner , he is broker who collects all rent from us and pays to actual owner.
I will give 20000 Rs to my Father as rent but actual rent may be some 10000 he give to actual owner, so in this case will 20000 comes under tax exemption for me?
Hello Sir,
I would like to know one thing after calculating the least amount of the above 3 rules which u had specified,how to decide the rent amount?
Thanks
hello sir my basci pay 13910 Rs i am taking HRA 2781 , but i am paying home rent 4200 RS it is admisible for Income tax
i am paying rs. 20000/- p.m. towards hou7se rent but not getting any HRA from my employer how much exemption I can claim in income tax . pl. help me
I have query
In case a person occupied two rented house, one at where he is employed say as Mumbai and another at place where his/her family is residing say at Surat and where he/she visits at weekend, whether the entire rent paid by him/her is considered in calculating HRA exemption. Any Reference case law or circuler in this regards.
Dear sir,
There is a requirement of disclosing PAN of the landlord if the rent paid is in excess of Rs 180000PA .[As per latest CIRCULAR NO. 05/2011, para no 5.2(9) issued by CBDT]
Sir,
Due to some legal reason’ the agreement of my flat on the name of my elder brother, but he is not staying with us. all actual rent and others paid by me. I m getting 5700 HRA PM and paying 5500 PM. so can i get HRA exemption.
Please explain how?
Thanks M Junaid
I have a query :-
In case a person occupies two rented accmodations, one at the place where he is employed say at Haridwar and another at place where his/her family is residing say at Delhi & where he/she visits periodically, whether the entire rent paid is eligible for calculating HRA exemption. Any case law or circular on this issue.
Is it necessary to give PAN of landlord to get benefit of HRA?
Can You Tell About HRA Full Meaning?
& What HRA ?
whethere there is need to give PAN of land loard to get benefit of HRA. whethere there is any moneytory limit regarding PAN to get benefit
whether there is need to give land loard PAN to get HRA benefit. whethere there is any monitory limit to give PAN
Hi
Can both the working spouses(same company) claim HRA tax benefit separately
sir
i m constable in rajasthan police ajmer district. sir mera attchment transfer date 30- jan 2011 ko police station gegal se ajmer sp office ho gaya tha. actullay gegal rural circle me hra 10% milta h. muje proper ajmer m 11 month ho chuke h. kya after 6 month muje ajmer city ka 20 % hra mil sakta h. agar milta ha to kis rules se. plz send me zerox cpoy of hra rules. thanks
My basic salary is Rs48790for a month and subsequently receiving Rs25000/ as house rent allowance, i am paying Rs20000/- pm House rent.
please tell how much amount will be taxable
An employee leaving in rented house since his construction is not yet completed. henc he is claiming both HRA as well as Housing loan. Pls let me know what is rule appliable
1. Till how many years can he calim both hra as well as housing loan
hi,
if a married female receives an HRA, can she pay the rent. if the house she stays in after marriage belongs jointly to her husband and uncle in ration 50/50.
Can she pay rent to her husbands uncle and claim HRA deduction of only half rent which she is paying to her husbands uncle.
Pls advice
Thanks !!
Dear Sir,
I get annual salary of Rs. 1140000/- and paying 7500/- House rent per month.
Can I get any relief in incom tax?
Regards,
Alok Dixit,
Batala (Punjab)
I have a house property which is let out and income is being charged as rental income. I stay with my parents and pay rent to them in the same city. Can I claim hra benefit? Thanks!