What is HRA?
House Rent Allowance (HRA) is the allowance provided by an employer to their employee as a compensation for house rental expenses paid by the employee. It forms part of the salary paid by the employer to their employee.
Calculate Taxable HRA
House Rent Allowance (HRA)
The House Rent Allowance to Individual Salaried employees is exempted from Income Tax in terms of (Section 10(13A) & Rule 2A) of Income Tax Act, subject to the following conditions:
|House Rent Allowance|
|Exemption||Least of the following is exempt:
a) Actual HRA Received
b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Madras)
c) Rent paid minus 10% of salary
* Salary = Basic + DA (if part of retirement benefit) + Turnover based Commission
i. Fully Taxable, if HRA is received by an employee who is living in his own house or if he does
not pay any rent
ii. It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more than ₹ 1,00,000 [Circular No. 08 /2013 dated 10th October, 2013].
|Available to||Individual - Salaried employee|
HRA Exemption When Employer Refuses to Provide Deduction Benefits
Even if your employer refuses to provide HRA related tax benefits, you can claim the same at the time of filing income tax returns. As per the HRA rules, you will receive the exempted amount as the refund of the excess TDS.
HRA Exemption When More Than 1 Family Member Pays Rent
In case more than one member of the house is earning, such as you and your spouse, and both are paying the house rent, then the two of you can claim the HRA related tax rebate by furnishing separate rent payment receipts. However, if there is a single rent paid, then any one of you can only claim the HRA exemption in such a case.