Sage-Tips

Is house rent allowance taxable?

ThinkStock Photos The amount of HRA exemption is deductible from the total income before arriving at a taxable income. For most employees, House Rent Allowance (HRA) is a part of their salary structure. Although it is a part of your salary, HRA, unlike basic salary, is not fully taxable.

How much rent can I pay to parents?

You can claim HRA deduction equivalent to the least of the following: Actual rent paid. Basic pay minus 10 per cent of rent paid. 50 per cent of the salary, if staying in a metro or 40 per cent of the salary, if staying in a non-metro.

What is the maximum HRA that can be claimed?

50\%
Claim Rules for HRA Your allotted HRA cannot exceed more than 50\% of your basic salary. As a salaried employee, you cannot claim for the full rental amount you are paying. Your exemption will be based on the least of the below mentioned options: The actual amount allotted by the employer as the HRA.

How much rent can be shown in income tax?

For them, Section 80 (GG) of the Income-tax Act offers help. An individual paying rent for a furnished/unfurnished accommodation can claim the deduction for the rent paid under Section 80(GG) of the I-T Act, provided he is not paid HRA as a part of his salary by furnishing Form 10B.

Can you rent to a family member?

Is renting my property to a family member legal? While not illegal, you must have the right mortgage in place to rent in the first place. You must also be aware that some mortgage lenders see renting to family as a higher risk buy-to-let mortgage than letting to non-family and they may apply different lending criteria.

Is HRA claimed on rental income taxable for parents?

HRA claimed is taxable for parents 1 Rent paid by you to your parents shall be taxable for them. 2 The rental income paid by you is to be reported under the head ‘income from house property’ in their Income tax return. 3 However, they can claim property taxes paid by them and also claim a 30\% standard deduction from this rental income.

What is the maximum amount I can claim on my HRA?

HRA can’t be more than 50\% of your basic salary The full amount cannot be claimed as the exemption is based on the least of the following: Actual rent paid (-) 10\% of the basic salary. Actual HRA received from the employer

What is HRA exemption under Section 10(13A)?

If you are a salaried professional and living in a rented house, HRA exemption is one of the biggest tax saving options, under Section 10 (13A) of the Income Tax Act. For self-employed, HRA tax deductions under Section 80 GG are available.

What are the tax exemptions on House Rent Allowances?

Even if the employer refuses to provide for the tax benefits of the House Rent Allowances, the employee can claim the HRA tax exemption when he or she files the income tax returns. The exempted monetary amount can be received as the refund of the excess TDS. Tax Exemptions on HRA When the Rent is Paid by More Than 1 Member of the Family:-