House Rent Allowance

POSTED BY srinivas vaddanam ON August 22, 2013 1:05 pm COMMENTS (3)

HI Manish & Team,

I need small information about income tax HRA guidelines. My question is.

I am paying house rent of 9000 per month. But my company pays me hra as 5000. We can’t get a house for family in mumbai for that rent. How can i claim the hra excemption for the rent I am paying.

 

Thanks & Regards

Srinivas

3 replies on this article “House Rent Allowance”

  1. Dear Srinivas, the least of the following 3 is your tax free HRA.

    1. Rent paid in excess of 10% of your basic = actual rent – 10% of basic = 9000 – 800 = 8200
    2. As you are living in Mumbai, 50% of basic = 8000*50% = 4000
    3. Actual HRA received = 4300

    From the above 3 points, the least amount is point 2 i.e. 4000 Rs.

    Hence out of 4300 Rs. HRA, 4000 Rs. is tax free & remaining 300 Rs. is taxable.

    if you want full HRA to be tax free, you should ask your employer to increase the Basic salary to at least 9000 so that the 50% of basic salary becomes 4500 Rs. & in this case full HRA amount 4300 Rs. ‘ll be tax free.

    Thanks

    Ashal

  2. srinivas vaddanam says:

    My basic is 8000 and hra is 4300.

  3. Dear Srinivas, what’s the basic salary that you are getting?

    thanks

    Ashal

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