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
I am Working in Chennai and staying in my flat in Chennai. Myself & my wife are joint owners of this flat. Can I claim HRA exemption in this case?
can you Please inform me whether Surrender LEAVE HRA is EXEMPTED from INCOMETAX or not
Dear Sir, Please inform Surrender LEAVE HRA is EXEMPTED from INCOMETAX or not
Dear Sir, Please inform Surrender LEAVE HRA is EXEMPTED from INCOMETAX or not
Is the maintainance cost included in the HRA ?
I have rent receipts of actual rent and Maintenance receipts from society directly where i have rented the house.
Is Maintenance cost accountable against HRA?
thanks in advance.
My employer is pressing me to provide PAN details of landlord. To inform you, I am paying rent of Rs.8,500 per month & my landlord is not willing to provide his PAN details. As confirmed by him, PAN details are required only if rent is more than Rs.15,000 per month. Kindly advise what is the remedy available to me in this case.
Sir,
I am working as Consultant on temporary basis @ a remuneration of Rs.25000/-as consolidated from 2007 onwards, initially for 1 year and subsequently enhanced the period for next 1 year. i am working on full time basis as per order and no other work is undertaking.
My question is can i avail Rs.2000/- as HRA under income tax rule and if so what are the formalities to be followed.
Dear Sir, Please inform mewhether Surrender LEAVE HRA is EXEMPTED from INCOMETAX or not MUTHUSAMY.N
gconnect par salary=pay+gp for nps(old pension scheme)
salary=pay+gp+da for nps(new pension Scheme) employee for Income tax
rent rebate k liye pay+gp+da only for NPS employee
for old pension ke emp ke liye pay+gp only
please tell me
for what purpose 10% on BA+DA is being deducted from actual rent paid even though I pay it.
my salary particulars are as :
Basic pay: 37400
Grade pay: 9000
DA: 33408
House rent paid: Rs.13000 per month
Actual HRA received:9280 per month
please advise what will be my HRA exemption?
Jagvirdixit@yahoo.com
sir,i paid home loan interest Rs.113000 which is not at the place of service. I paid Rs. 72000 (6000*12) as rent at the place of service . I recived Rs. 144000 (12000*12)HRA,from salary. My salary is Rs. 113000 p.m. including DA, HRA, etc. Can i get exemption from IT both i.e. home loan interest & actual rent paid. If yes Pl. calculate & suggest me by which section of IT this exemption is. Thank You.
I am a state govt employee.The Govt.give me a Quarteres. and I have to pay License fees as per rule.whether license fee is deductable from salary like HRA in case of rented house or not? Please clarify.
what is impact on my tax calculation.
Hello Sir / Ma’am
Can i claim interest on home loan & HRA benefit within same city, if house is not self occupied. for which home loan have taken.
Also please suggest that current company can consider for issuance of Form 16 & TDS deduction.
Regards
Manoj
Hello Sir / Ma’am
Can i claim interest on home loan & HRA benefit within same city, if house is not self occupied. for which home loan have taken.
Regards
Manoj
Sir I m central govt emp. my basic pay is
1. Basic Rs 678640/-
2. DA =Rs 441584/-
3. HRA received=Rs 135728/-
4. Actual house rent paid= Rs 180000/-
Is there any amount which can be exempted from from income tax. please calculate my ddo not giving any exemption.
I am a state govt officer.The Govt.give me a rent free unfurnished accommodation. and I have to pay License fees as per rule.whether license fee is deduct able from salary like HRA in case of rented house or not? Please clarify.
what is impact on my tax calculation.
I am staying in company accommodation. Company is calculating perks for housing accommodation and company is not paying any HRA to me.
I want to know whether HRA amount can be deducted from housing perks calculation. Pl mail me at parira_ak@rediffmail.com
I m employee of Postal Dept. My pay details are as below
Basic 12340
DA 8885
HRA 1234
Actual rent paid per month Rs 3500/-
Can i get exemption from income tax?
If yes, under which section? and approx. amount of exemption?
which document require to submit at our A/C office
Dear Sir,
I am paying home loan. At the same time I am getting rent from my own house. I am getting HRA from my hospital and staying in a rented house given by hospital. My query is whether the ammount of rent I am getting is taxable?
hi,
I am working in Bangalore while my dependent parents are living in other city. I am paying rent for both the house as i am the only earning person. Is there any way by which i can count the both HRA in my HRA calculation for taxation purpose?
Thanks in advance.
I am a state govt officer.The Govt.give me a rent free unfurnished accommodation. and I have to pay License fees as per rule.
what is impact on my tax calculation.
Can we claim both HRA and interest on the letout property for the same city.. currently i am staying in the rented house
and the flat owned by me also been rented.. and both exist in the same city.? and how to calculate the Municipal Valuation
and Standard/Fair Rent in North bangalore area?
The above said article is relevant for Central Govt Employees also?
Is there any separate HRA rule for Central Govt Employees?
if an employee is showing that he is paying Rent to his wife then what is the position of employer while deducting TDS, should the employer is liable to give him credit of HRA exemption or not.
is there any rule in income tax act for the same?
Is there any condition as to how much amount is to be paid as rent. Receipts are compulsory to submitt or there are some exemption of certain amount.
hi,
seek help from the experts on HRA calculation exemption on following issue:
1) April to september
basic- 7500
DA- NIL
Commm.- Nil
rent paid- 7000
HRA received- 10000
2) October to March (Salary increment given retrospectively w.e.f. 1st April of relevant previous year and arrears of basic and HRA received in October)
basic- 12000
DA- NIL
Commm.- Nil
rent paid- 7000
HRA received- 12500
let me know exemption details with detailed calculation on HRA
thanx for your support
Dear sir
could U pls explain the HRA rules for the employee working in the textile (spinning) mills
percentage of HRA for above employee,minimum and maximum percentage
i am a salaried employee in a pvt ltd company and getting HRA of approx 1lacs annually, and i want to claim deduction of HRA as i am paying rent for my stay in hyderabad, as m paying 7000pm as rent but my landlord is not willing to give me rent bills in this case what can i do for caliming deduction?
SIR, I AM CL-1,STATE GOVT SERVENT, IN MAHARASHTRA,. GOVT HAS ALLOTTED ME A DESIGNATED QUARTER IN CAMP, WHICH IS RENT FREE BUT DESIGNATED ONLY FOR MY POST.2)IN THAT QUARTER A LADY MEDICAL OFFICER IS RESIDING WITH HER HUSBAND,WHO IS POSTED NEAR BY TO OTHER INSTITUTE. OF SAME POST OF MINE.NOW I AM RESIDING IN RENTED HOUSE AND ALSO AVAILING HOME LOAN BENIFIT–3) KINDLY ADVICE ME CAN I CLAIM H R A AND IF IT IS PERMISSIBLE KINDLY TELL ME THE IT-RULE NO.
R/s
Sir i am a state govt. Employee and my wife is central govt. employee she takes a house rent allowance but i does not received house rent allowance. we both are living in own house. can i also received house rent allowance please suggest me. if i am also eligible for house rent allowance then which govt. order number & date.
regards
Anish Bhusari
9827331747
I am a pensioner and aam staying in a rented house.Please advise if HRA exemption is available to me.
Mr X is an employee in a PSU. He is posted at Kolkata and residing alone in Company Guest House on payment of G.H.RENT and drawing HRA. His family is residing at Chennai in a seperate rented accommodation.Please confirm if the rent receipt of Chennai can be produced by Mr X for his tax exemption on HRA.
dear sir
i m govt employee and drawing technical allowance with my salary. Is the technical allowance is exempted from tax, if yes pls suggest section.
regards
avinash singh
8143187223
dear sir
i have taken home loan for self occupied at my home station and claiming under 24(b) , i am working in visakhapatnam, can i take exemption under section 10 also for my HRA.
pls advice me
avinash singh
8143187223
Dear sir I have a query.
I am in scondary education and my wife is in basic education department. In what conditions I and my wife both can claim for exemption in HRA.
Please reply to my e-mail.
Dear sir I have a query, I am in secondary education and my wife is in basic education department. In what conditions I and my wife both can claim for exemption in HRA.
Regarding HRA, I am having home of small of 180sq ft in my name and I have taken a another room for rent becz of small space, Can I claim HRA for room rent paid… I am regular tax payer of Rs50000/- per every year
Hi i stay in gurgaon NCR, does it come under Metro
If HRA claim amount is more than Rs15000/-, PAN card of House owner is required to attach????/
As of April 2012 is it compulsory to give the PAN number of the Landlords for the Tenant to claim HRA?
I understand this example of HRA calculation on salary, so thanks for this
Hi,
I actually pay rent for my self in bangalore and for my father in Indore(MP). I was going through some post on internet, where it says that if you pay rent for your father, then you can declare that also as part of HRA.
Suppose if i pay rent 15000 p.m. whre i stay in bangalore.
And i also pay rent 7000 p.m. to my father where he stay in Indore (MP).
Can my sum 15000+7000=22000 be declared as HRA in my TDS.?
Thanks,
Vinay
What would be the situation when 10% of basic Salary is more than the actual HRA received.
in salary income if the employer is giving HR to Employee & emplyee having a hosing loan then we get deduction of both HRA & Hosing loan or not
Hi There,
Just need some help please. I had submitted the rent receipts to my company which got rejected since they were higher than 15k per month and I did not have my land lords PAN. Is there now a way to directly claim HRA benefit from the income tax. I think an additional amount of 20k got deducted from my salary. Please help!
Thanks,
Kritika
Will i get the HRA rebate if my house is owned by my spouce and he/she is not living with me.
if some one gets 701460/ annually and 32298 as HRA and then the receipt of house rent of how many rupees should be submitted. plz mail me me asap thanks
Whether mumbai suburbs, thane district and raigad district are part of Mumbai metro for cliaming 50 % HRA exemptions ???