HRA i.e. House Rent Allowance is the amount paid as a part of salary by the employer to the employee. Employee can get tax benefit on this HRA amount if he is living in rented house and paying rent. This simply means that if your salary skip has HRA component, then you don’t have to pay income tax on this amount. However you can’t save income tax on the full amount.
If you are living in a rental house or paying for your accommodation and do not get HRA from your employer then also you are applicable for the tax deduction in income tax return. These people can also claim for HRA exemption under section 80(GG) of IT act.
Actual HRA offered will be the lowest of the following 3 provisions:
Though there are some conditions which should be fulfilled if you want tax deduction in this case. The criteria are as bellow:
The exemption on HRA is calculated as per 2A of Income Tax Rules. As per the rule 2A, the least of the following is exempted from salary under Section 10(13A) and does not form part of the taxable income.
If you are receiving HRA but are staying in our own apartment, then you cannot claim the HRA exemption benefit. Always remember that the whole HRA amount received will be taxable in your hands.
The following documents will be required to claim tax exemption on HRA. They are as follows -
a) Can I get tax rebate if I am staying in my own house?
No, you cannot claim HRA Exemption in this case.