house rent allow.

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nitin kumar vijay (Querist)

08 February 2008 Sir,

Please advise that Mr. Rajesh received house rent allowance Rs. 2500/-P.M. & his total earning 15000/-P.M. (Basic 10000/- P.M.) He is residing at bachelors hostel Provided by Employer for 550/-P.M. as rent in his own Building But his family are residing in house which rent paid by Mr. Rajesh Rs. 3000/- P.M.

Pl. advise that (i) he is eligible for exemption of (how much) house rent allowance after submitting rent receipt ? & Give total taxable amount for the same (if he is married & pay rent for his wife & chiled)

(ii)What is diff. If he is unmarried & pay rent for his dependent mother & father.

Thanks

R.V.RAO

R.V.RAO (Expert)

08 February 2008 HRA UNDER SEC 10(13A)and rule 2A exempts least of the following three amounts.

1.amount equal to 50%of salary if res.house is situated in Mumbai,kolkata,chennai,delhi or 40% of salary if res. house situated elsewhere.

2.actual HRA

3.excess of rent over 10% of salary
( SALARY INCLUDES BASIC AND D.A AND COMMISSION IF ANY PAID TO THE EMPLOYEE AS FIXED % OF TURNOVER ACHIEVED BY THE EMPLOYE AS PER HIS CONTRACTUAL TERMS)

IT DOES NOT MAKE ANY DIFFERENCE OR IS AN ISSUE AS TO HOW MANY HOUSES FOR WHICH RENTS ARE PAID BY AN ASSESSEE.
MARITAL STATUS HAS ALSO NOTHING TO DO WITH THE LIMITS STATED IN THE ABOVE EXEMPTION.
CALCULATION OF TAXABLE HRA POSSIBLE ONLY WHEN THE CITY OR PLACE OF SITUATION OF RES. HOUSE IS MENTIONED BY THE QUERIEST.
R.V.RAO

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

08 February 2008 Clarification required:
1.Is the employee and his family are living in the same town?
2.Salary includes Dearness Allowance(DA) if terms of employment specifies so. Is he in receipt of DA?

Please note that the assessee shall be in occupation of the house in respect of which he pays rent and claims HRA relief.

Arun

Arun (Expert)

08 February 2008 U/S 10(13A) it does not mention any rent payment on behalf of his dependents. Hence the assessee can claim based on the amount which is beneficial to him. In this scenario the assessee can opt for Rs.3000/- instead of Rs.550/-

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