10 February 2016
Case: Mr A lives in Noida in a house in which the rent is paid by wife, he receives HRA from his employer situated in NOIDA (workplace). He has a house in Ghaziabad which is owned by him – let’s call the house H1. He travels to his hometown Allahabad (700 kms away from Noida) on weekends and on holidays and lives in Parents House owned by Father. Mr A pays rent to his father for occupying the house for residence and part time business on Saturdays, let’s call this house H2.
Query: For claiming HRA, is it a precondition that the house should be at the place of work, ie. Noida? as mentioned the H2 is being occupied for a part of the month.
In the above case Mr A is paying rent to his father in Allahabad for H2 and has let out the property in Ghaziabad for Feb and March 2016. Can he claim HRA against Allahabad property H2 and Housing loan benefit for Ghaziabad property H1.
Evidence of actual rent paid and train tickets of travel available.
10 February 2016
HRA can be claimed for the house which assessee resides, since the HRA received as salary income you can claim the house at the place of employment or nearby not for the house away 700 kms. so you cannot claim HRA for Allahabad house in any case
11 February 2016
HI Ramesh, thanks for the reply. the Act mentions: section 10 (13A) 9 any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee, to such extent 1 ] as may be prescribed having regard to the area or place in which such accommodation is situate and other relevant considerations.] 2 Explanation.- For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply in a case where- (a) the residential accommodation occupied by the assessee is owned by him; or (b) the assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him;]
reading the above, the two important words are "residential accommodation occupied", should not own and "rent actually paid". Is there any related Rule or Case law that challenges the case I have presented. Please note (reiterating) Mr. A actually lives in H2 (ie. occupies) on weekends and Holidays which is 30% of the year.
would request you to answer my other query "is it a precondition that the occupied house has to be near the office or same city or close by city??"
12 February 2016
There is no precondition I agree, But purpose of HRA is to meet the rental expenses during the course of employment so claiming for the house which situated 700 kms away from the employment place will be treated as " abnormal condition" in any case.
CAclubindia
