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
Hi,
I am paying rent at 2 places. I am staying for 4 nights in Pune and 3 nights in Mumbai.
Since Mumbai rent is higher, can i claim that?
Note: I am working in Pune.
Thanks.
I AM A YOUNG MAN OF 28 YEARS OLD I AM POSTED AT KUPWARA DISTRICT (VILLAGE) AND ATTACHED TO SRINAGAR CITY WHAT WILL BE THE RENT IS IT 10% OR 20%
I think rules have changed now. You need to submit landlord`s pan card if you want to take exemption on more than 1 lac. This has affected lot of people where landlord is not ready to give the pan card. What to do in these type of cases?
Regards
Ritz
Is it Mandatory to submit “Rental agreement” in addition to “Rent Receipt” to claim HRA for salaried emp? If i pay HRA more than 8000/- per month.
i am working as contractor. i will get hourly base money.. every month tax will be deducted at source. while filling the returns. Can i use ITR-1. Also how to show my support document for tax saving.. eg, house rent, lic, home loan. i can fill numbers in section provided in ITR-1. but my question is how to send my support document hard copy, while i sent my ITR-V, Do we need to add hard copy of tax saving docs?
Am I eligible to claim HRA Exemption when I stay in company guest house & my family stays in rented house in another city . rental if by me!
Pl. Advice.
Regards
mukul
This has reference to the new rule for availing HRA exemption. Since I was unable to submit the PAN Card details of my landlord in time my employer has not given the exempton for HRA in my tax calculations for the current financial year. The entire benefit availed by me in the previous months has been reversed and huge deductions made from my salary for February and March.
Pls advise the course of action for me to recover the tax deducted from me on account of HRA.
Alok
Hello,
is Hyderabad covered under Metro status?
I am staying in metro and paying rent, as well as I am paying rent for my dependent parents in other town…
Can I claim rent exemption in HRA rule for both rental premises.
I AM A SALARIED PERSON. I AM LIVING MY OWN HOUSE CAN I EXEMPT FROM HRA . CAN I CLAIM MUNCIPAL TAXES OR ONE TIME MAINTENANCE COST OR OTHER MAINTNANCE COST PAID TO BUILDER? HOW THE CALCULATIONS ARE DONE IN MY CASE
In the latest classification of cities for Central Govt Employees or PSUs, Faridabad is declared as Class-Y City but * marked. In the footnote for *, it is mentioned that for the purpose of extending HRA on dependency basis.
My question is that if my place of posting is Faridabad, what class of city will be given to Faridabad for the purpose of HRA ?
Secondly if my place of posting is outside Faridabad and I retain my family at Faridabad then what class of city will be given to Faridabad for the purpose of HRA ?
Dear Sir,
I need a clarification i was working in Chennai till Jan 14 moved to Kolkata on 23 rd Jan 2014 giving rent in chennai and also paying in Kolkata since i made contract in Chennai as well as in Kolkata how to get the HRA Rebate
One more doubt since i have taken furnished accomodation rent is collected in Kolkata on two accounts one for rent and other for amenities provided could you spell out how much possible to claim.
Sir,
I have my own new house in my home town which is not rented . I have my housing loan running. I am working 600 kms away from my home town . I am paying a rent of 2640 in tamilnadu housing board . Can I claim hra exemption.
what is the amount limit upto which any reciept submission is not necessary for HRA deduction from salary in tax calculation
SIR THIS IS VERY GOOD ARTICLE
I AM LIVING MY OWN HOUSE CAN I EXEMPT FROM HRA BECAUSE ANY ONE WHO IS OWNING HIS HOUSE MAINTAIND HIS HOUSE SO MAINTINANCE ALLOWANCE SHOULD BE APPLIED IN HRA
can any one pls suggest
i pay rent of Rs 8100 per month in New delhi, and have given rent receipt & rent agreement to my employer, my rent is less than Rs.100000 per annum, as per new circular of CBDT (HRA exemption of over Rs 8,333 a month will need the landlord`s PAN card details), but my employer is still asking for the PAN card details of the Land lord to which my land lord is not willing to provide the same. (i am from jaipur, Rajasthan, with all ID and PAN card address proof from Jaipur). pls suggest what should I do? or i have to bear this additional tax burden on my salary. if unable to submit the PAN card details to my employer. pls reply
1. What is the maximum limit of exemption in income tax on interest and principal
of House Loan ?
2. I am living in a house which is in the name of my wife. Can I eligible to get house rent exemption under income tax for the assessment year 2014-2015 ?
I have reported all deductions to my employer. But he ask me to claim HRA exemption by myself as he dont know how to calculate it. Now how can I claim them in my Income Tax Return. What documents i need to submit and to whom?
I have reported all deductions to my employer. But he ask me to claim HRA exemption by myself as he dont know how to calculate it. Now how can I claim them in my Income Tax Return. What documents i need to submit and to whom? If deductions of HRA are not mentioned kn Form 16 then how to claim???
dear sir,
is bonus also calculated in salary for HRA EXEMPTION
Is there any ceiling of exemption on HRA u/s 10(13A), such as Rs.24000/- per annum?
I want to know about tax benefits in case of plot loan .is plot loan and home loan are same benefits
If tenant pays Maintenance charge of flat, can that be claimed alongwith Rent for HRA?
I have stayed joined the central government organisation and stayed 2 months in its guest house for which i have paid the requisite rent. After that I have been provided the government quarter by the office. Now my question is that am I eligible to get the HRA for the period of two months which I have stayed in the guest house. If Yes then please refer me the required O.M. or Circular/ Order etc. of any central government office.
Sir,
For FY 2013-14, I have stayed in rented accommodation for only 8 months at a monthly rent of Rs 12000. For the purpose of maximum HRA exemption limit, will the computation be done on a monthly basis or annual basis?
Example- For my case, the monthly HRA comes out to be Rs 8800 but I payed rent of Rs 12000 for 8 months. So shall I claim exemption of 8800 * 8 = 70,400 or shall I claim 12000 * 8 = 96000 ?
Sir
in continuation of my earlier mail I have not disposed off the old flat I intend to keep the flat for let out purposes.
Sir
My self and my wife are central government employees we have a two bed room apartment which was purchased in 2002. Now in 2013 we have purchased a 3 bed room apartment (50% share each) and I have taken a loan of rs. 30 lacs. The loan was sanctioned on September, 2012 we were paying pre-emi for the amount of Rs. 2223250.00 which was released on September, 2012. In October, 2013 the final/remaining amount of Rs. 776750.00 was released. I will be shifting to the new house in the month of February – March, 2014. During the financial year 2013-14 the bank has given statement of interest paid and principal paid as under:
Interest Part – 292137.00 and Principal Part – 25446.00
Now I have the following queries
1. can we take the full benefit of principal and interest of both husband and wife at 50% share for income tax purposes. as interest also includes pre-emi interest also as the final loan amount was released in the month of Oct., 2013.
2. what about other income tax rules which I have to follow.
Reply to the above mail is needed urgently.
Hi,
I have a question below:
Suppose if I have changed a company and joined an another one during the financial year 2013/14, I am eligible for an HRA exemption of only latest company or from both the ones. I have not submitted any rent receipt/aggrement to my previous employer while leaving.
Thanks,
Nirav
sir ,i m central govt employee transferred from delhi to assam getting double HRA . what is the rule GETTING REBATE ON BOTH HRA?
Sir,
I am working in corporate world and get the basic salary Rs.156600.00 + 60% preks total CTC is coming Rs.250560.00.
I crave to know will i pay income tax or it is exempted.
CALCULATION OF INCOME TAX FROM FOLLOWING EXAMPLE-
BASIC-15000
GRADE PAY- 5000
DA- 80% OF BASIC+GRADE PAY
HRA – 10% OF BASIC+ GRADE PAY
RENT PAID Rs 6500 PM.
CITY – VILLAGE AREA
GPF – 4000 PM
TA – 400 PM
ARREARS OF SALARY IN GPF – 25000
PROFF. TAX – 2500 ANNUAL
HOME LOAN PRINCIPAL- 40,000 ANNUAL
HOUSING LOAN INTEREST – 10000 ANNUAL
INSURANCE – 10,000 ANNUAL
PLEASE GIVE EXACT DETAIL CALCULATION FOR TAX COMPUTATION
There is a difference between salary and basic salary and in calculation for tax benefit for HRA only basic salary is considered but in example this is not the case, a confusion is created please check it and hope to get my doubt clear. Thank you.
sir i am a central government employee but i am not getting hra due to i am not married and me and my family leaving in rent house. but m paying 5000 per month….
so i want to know what should i do
and if i can fill itr thn where i will show this amount
and what document i should produce
plz inform me sir
thanks Regards
Rahul singh Panwar
A) Details as per your article –
Can I pay rent to my parents or spouse to avail HRA benefits?
You can pay rent to your parents, however, they need to account for the same under ‘Income from other sources’ and will be entitled to pay tax for the same.
B) Sir, their above income should be declared under “Income from House Property” ??
Please clarify
Dear Viral,
If rent paid is more than Rs. 1lac then the pan number is compulsory.
One of the best and very informative post on TaxGuru. Simple and knowledgeable.
I am working in an organisation, which is deducting 10% as HRA and provided residence quarter inside campus. Organisation gives 10% HRA and takes 10% HRA from the salary. Whether I am eligible for exemption of HRA?
Sir, i am working in punjab state transmission carporation ltd and my wife working in health department in same city and living in our own house. Please tell me can we claim House Rent both husband and wife.
please tell me priscribed limit of house rent allowances
sir, please help me l am doing a orivate job my basic salari is 49000 oer month and 1000 permonth conveyons 10000 hra per month 780 pf deductiin that means total salary is 60780 per month. I submitte rent receipe of 10000 per month. How much will be the rebate on hra please suggest
Though I hold a property in Kolkata .I pay rent to stay near my daughter’s school in Kolkata. I had taken home loan against my property, had taken complete tax benefit for the same last year itself. Can I claim HRA
and House loan for Tax exemtion in my name?
plz answer , if a person’s father is died and he took loan for constructing his house of 20 lac fro a bank (Hdfc) before death and then after his one son is handling father’s shop one is eng and also having two younger sisters even then bank is taking bank has made 34000 EMI for every month upto nine years where 20000 is the interest only how can a person lead its life can please tell us any rule for which the EMI can be lower down for the same time period .I will be very thankful .
Please ANSWER Please ANSWER Please ANSWER Please ANSWER Please ANSWER
pls tell me if I live in a rented house with my parents, in which my retired father is the tenant in te lease deed, BUT i PAT THE RENT EILL I GET THE DEDUCTION?
Though I own a property in Kolkata, I pay rent to my parents in Kolkata and stay with them. My property is vacant. I had taken home loan which I closed last financial year and had taken complete tax benefit for the same last year itself. This year I have no home loan. Can I claim HRA for the rent I pay to my parents despite the fact that I have a vacant flat in my name?
sir I am government employee and staying in government quarters and the whole amount of HRA is deducting from my salary. shall i get HRA exemption under section 10 [13 A].
sir I am staying in govt quarter and the whole amount of HRA is deducted from salary shall i get hra exemption
i am govt employee my basicsalary+ da 482498rs govt paid hra rs 1575 per month for deduction hra from total income how much house rent receipt submitted
My office in kolkata, I have a rented house, their my all family & parents are settled i get HRA exsumpsion benefit. but My work location is villai, their company provide me “RENT Free” accommodation & every month they Rs – 20000 in my account for additional house rent purpose. This additional HRA is taxable?
Pls clarify me.
dear sir,
my salary is 26400.00 per month and basic annual salary is 158400.00, so what amount i can show as a house rent- actual rent i m paying is 7000.00