Sage-Tips

How are government quarters calculated for rent?

Examples for calculation of exemption/deduction of HRA

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/-

What is the rule of house rent allowance?

As per the income tax rules, the tax-exempt part of the HRA (House Rent Allowance) is the minimum of the following amounts: Actual HRA component of salary. 50\% of basic salary if he resides in Delhi, Chennai, Kolkata, or Mumbai; 40\% if his residence is in any other city. Actual rent paid less 10\% of basic salary.

Can I claim HRA for leased house?

If a house is taken as lease for three years by paying lumpsum amount at once ,no need to pay monthly rent.

Can I claim HRA for 6 months?

To claim the HRA, one must have the rent receipts and rent agreement. However, if you’ve had paid Rs 15,000 monthly rent in Delhi for 6 months, and Rs 10,000 in Pune for the remaining 6 months of the year, the annual rent paid adds up to Rs 1.5 lakh (90,000 + 60,000).

Who are eligible for HRA?

50\% of the employee salary is eligible for HRA tax exemption if he or she lives in any of the Metro cities of India. The metropolitan cities of India include Delhi, Mumbai, Calcutta and Chennai. In case the employee lives in any other city then 40\% of the salary can be HRA exempted.

Is HRA a compensatory allowance?

“HRA is not a part of pay but is a compensatory allowance in lieu of accommodation… and is not to be used as a source of profit.

Is HRA payable to husband and wife?

HRA will be paid to both husband and wife even if they work in the same station and did not avail Government Quarters. Even if one of them avails the Government residence in the same station where the other spouse is working, he/she will not be entitled for HRA.

Is rental agreement mandatory for HRA exemption 2018?

Yes, you can claim the HRA exemption by paying rent to your parents. But it is always advisable to have a rent agreement. You would need rent receipts to claim HRA exemption. Also, your parents need to show rental income from you in their income tax return.

Is House Rent Allowance (HRA) exempted from tax?

House Rent Allowance (HRA) is exempted under section 10 (13A) of the Income Tax Act. Under House Rent Allowance rules and regulations, you will get exemption up to a minimum of the following 3 amounts: Actual House Rent Allowance (HRA) received by the employee in the year.

What are the house rent allowance rules and regulations?

Under House Rent Allowance rules and regulations, you will get exemption up to a minimum of the following 3 amounts: Actual House Rent Allowance (HRA) received by the employee in the year. Rent paid by the employee for his accommodation in excess of 10\% of his salary.

What is the HRA amount for rent in India?

The lowest of annual rent actually paid minus 10\% of basic salary, HRA paid by the employer and 40\%/50\% of salary depending on where you stay can only be claimed. For HRA calculation purposes, only Mumbai, Delhi, Chennai, and Kolkata are considered metro cities. All others are non-metro cities.

What are the rules for claiming HRA deduction?

1 The person claiming HRA deduction is a salaried or a self-employed individual. 2 The person must be living in a rented house. HRA tax calculations cannot be made for living in your own house. 3 You should be able to produce a proof for rent paid.