HRA claim for rent paid in a city different than the office

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An employee working remotely from Delhi for a Bangalore-based company was denied HRA tax exemption for rent paid in Delhi. The employer's finance team cited rules preventing claims for rent in a different city than the office. However, the advice given suggests this rejection is unjustified, as the employee's current residence is effectively their work location during the pandemic, making them eligible for the HRA exemption.

Prateek Jain

Prateek Jain (Querist)

13 January 2021 Dear Sir/Madam,

I joined my current organization (Software/IT), which is in Bangalore, remotely from my hometown, which is Delhi, during lockdown/Covid-19 (July-2020). I am still working remotely from my hometown (Delhi) and my employer is absolutely fine with it.

Recently, during the annual investment proof declaration exercise, I claimed HRA for the rent paid in my hometown (Delhi) but my employer's (Bangalore) Finance team rejected the claim stating that as per IT/Govt. rules and regulations, I am not allowed to claim HRA for rent paid in a city different than the work location even during Covid-19.

I am totally unsure as to what to do and what is the actual guideline from the authorities.

Kindly advise.

Thank you!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

14 January 2021 No justification in rejection of your HRA claim. During this pandemic your work location is your residence. As per rules you are eligible to claim HRA.

Prateek Jain

Prateek Jain (Querist)

14 January 2021 Hi Sir. Thank you for your response! Please, can you share the rule which supports my HRA exemption claim?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

15 January 2021 HRA benefit only if you are living in a rented property. This is the rule. You are living in a rented property. So you are eligible for HRA exemption claim.

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