Arrears related to current year which includes basic+hra

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This query is : Resolved

tiwari (Querist)

29 October 2009 Dear Sir/s,

My query is regarding HRA exemption on arrear of Salary (70 % basic+ 30% hra), here Arrears refer the amount of increment which announced in during middle of the year but effective from April(1st month) of Financial Year. The case is in Sep.09 month a company give increment of Rs. 11000/-p.m.(which includes 7700-basic+3300-hra) to a employee which effective from April'09 and company has paid 6 months arrear in Oct ’09 along with Sep'09 salary. Now I want to know can we get the benefit of amount of increase in hra from april to sep while calculating hra exemption. if yes or no, please provide any notification or circular from Income Tax Deptt, if any.
To understand the case a scenario given below:
In April to Sep salary is 33200(23240-basic,9960-hra) from oct it will be 44200(30940-basic, 13260-hra) arrear amt is 66000 (11000x6), rent p.m.16500/-

1. if we show two separate salary 33200(apr-sep) & 44200(oct -mar) +arrear 66000, then we will get hra exemption 139320/-
but
2. if we show only 44200/-(30940 -basic+13260-hra)from apr-march, then we will get more hra exemption i.e.159120/-

can we apply above no.2 ,is it correct?

regards
Tiwari

CA Kapil Aggarwal

CA Kapil Aggarwal (Expert)

30 October 2009 You may go to the 2nd option subject to you got TDS certificate from employer as per that.

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