Hra

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VIJAY BHATT (Querist)
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28 May 2015 If an employee has received HRA in his salary and staying employers accomodation but his family is staying away from him says in another city.

1) My query, then an employee is eligible to claim HRA rent paid for his family u/s.10.

2) My query, an employers has to calculate Perks for Accommodation provided to employee (even after employee is getting HRA and paid some rent also to employers)

VIJAY BHATT

VIJAY BHATT (Querist)
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03 June 2015 Awaiting for response from Experts...

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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28 July 2024 Let’s break down your queries regarding House Rent Allowance (HRA) and perks for accommodation provided by the employer:

### 1. Claiming HRA While Staying in Employer's Accommodation

**Eligibility to Claim HRA for Family Living in Another City:**

Under Section 10(13A) of the Income Tax Act, an employee can claim HRA exemption if they are paying rent for accommodation occupied by themselves. The key conditions for claiming HRA exemption are:

- The employee must actually be paying rent.
- The accommodation should be in the city where the employee is employed or in a city where the employee’s family resides.

However, if the employee is staying in accommodation provided by the employer, then the HRA exemption for the accommodation provided by the employer cannot be claimed. But, if the employee is paying rent for a separate accommodation where their family is living, they can still claim HRA for that rent paid, provided the other conditions are met.

**In Summary:**
- **If the employee is living in employer-provided accommodation**: HRA exemption is generally not available for the accommodation provided by the employer.
- **If the employee is paying rent for their family’s accommodation in another city**: They can claim HRA exemption for the rent paid for the family’s accommodation, subject to the provisions of Section 10(13A).

### 2. Perks for Accommodation Provided by the Employer

**Calculation of Perks for Accommodation Provided by Employer:**

When an employer provides accommodation to an employee, it is treated as a perquisite under the head "Salary." The perquisite value for accommodation is calculated as per the rules defined under Section 17(2) of the Income Tax Act. The calculation depends on whether the accommodation is provided in a metro city or a non-metro city.

- **Metro Cities (Mumbai, Delhi, Kolkata, Chennai)**:
- If the accommodation is provided in a metro city, the perquisite value is calculated as 15% of the salary (basic + dearness allowance) or the actual rent paid by the employer minus the rent paid by the employee, whichever is lower.

- **Non-Metro Cities**:
- If the accommodation is provided in a non-metro city, the perquisite value is calculated as 10% of the salary (basic + dearness allowance) or the actual rent paid by the employer minus the rent paid by the employee, whichever is lower.

**Example Calculation:**
- If the employer provides accommodation and the rent paid by the employer is higher than the employee’s contribution, the perquisite value is calculated based on the rent paid by the employer minus the rent paid by the employee, subject to the percentage limits specified.

**HRA and Employer Accommodation:**
- If the employee is receiving HRA and also staying in employer-provided accommodation, the employer must calculate the perquisite value of the accommodation. The HRA exemption would apply to any rent paid by the employee if applicable, but the value of the employer-provided accommodation is added as a perquisite to the employee’s salary.

**Summary:**
- **HRA Claim**: Yes, you can claim HRA exemption for rent paid for accommodation where your family is living if you are staying in employer-provided accommodation.
- **Perks Calculation**: Yes, the employer must calculate the perquisite value for accommodation provided by them, even if the employee receives HRA and pays some rent to the employer.

### Additional Notes:
- Ensure you maintain proper documentation for the rent paid and the accommodation provided by the employer.
- For precise calculation and compliance, consulting a tax professional or financial advisor is recommended.

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