House Rent Allowance (HRA) Exemption Rules & its Tax Benefits

  • May 6, 2020
  • CA Chandan Agarwal's Office

HRA is covered under Section 10(13A) of Income Tax Act 1961. Salaried Employees who live in a Rented house can claim HRA to lower their taxes – partially or wholly. The decision of how much HRA needs to be paid is made by employer. Part of Salary is apportioned to HRA.

1. CONDITIONS FOR CLAIMING HRA EXEMPTION?

– Salaried Individual only can claim HRA.

(Self employed cannot claim HRA. However Self Employed can also claim deduction of Rent paid under Section 80GG of Income Tax Act 1961.)

– Stay in Rented Accommodation

(Not living in a self owned).

– Rent paid exceeds 10% of Salary.

– HRA is a part of Salary. 

(Can be seen in Form 16(B) Sr.no. 2 (e).)

– Not paying rent to spouse.

Read on me: https://taxguru.in/income-tax/house-rent-allowance-hra-exemption-rules-tax-benefits.html

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