Hra exemption on company provided accomodation.

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ravi (Querist)

07 June 2019 I AM EMPLOYEE IN TATA MOTORS INDIA PLANT. I GET HRA WORT RS. 10,000 PER MONTH FROM MY EMPLOYER AND MY EMPLOYER DEDUCTS RS. 2500/= FROM MY SALARY EVERY MONTH AS I LIVE IN COMPANY PROVIDED HOUSE. CAN I CLAIM INCOME TAX EXEMPTION ON THAT AMOUNT WHICH I PAY EVERY MONTH TO MY EMPLOYER? THANKS.

ADNAN HASAN

ADNAN HASAN (Expert)

08 June 2019 Dear Ravi,
If company is charging fair rent for the accommodation provided to you then you can claim your HRA exemption, HRA exemption is based on specific condition which is as under:-

a) HRA received (as in your case it is Rs. 120,000 for a year)
b) Rent paid less 10% of basic
c) 40 % of basic or (50% of Basic in residing in metro city i,e Delhi, Mumbai, Chennai, Kolkata)

Minimum of the above three will be exempt.

If rent charged by the company is not fair or company provided concessional rent accommodation to the employees then entire HRA received will be fully taxable and valuation of concessional rent w.r.t. perquisite will require to be made.

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