Hra - rent paid for accomodation in two cities
This query is : Resolved
11 March 2013
A company pays HRA to an employee "X".
The employee pays rent in two cities.
City 1 - where he stays alone and is his place of posting.
City 2 - where his family stays. He visits this city once a month.
City 1 and 2 are about 500 Kms apart.
Query -
For purposes of HRA exemption,
Whether rent paid in both cities can be clubbed?
If rent for one city is to be considered, which city is to be considered?
The employee pays rent in two cities.
City 1 - where he stays alone and is his place of posting.
City 2 - where his family stays. He visits this city once a month.
City 1 and 2 are about 500 Kms apart.
Query -
For purposes of HRA exemption,
Whether rent paid in both cities can be clubbed?
If rent for one city is to be considered, which city is to be considered?
11 March 2013
Hi Suraj
Section 10(13A) of Act “any special allowance specifically granted to an assessee by his employer to meet expenditure incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee”
1) Word “occupied” is not further illuminated here but it is common perception that House rent allowance is given by the Employer so that employee can stay close to the office of employers.
2) They have used the word “Residential Accomodation” and not “Residential Accomodation(s). It seems intention is to exempt rent paid for only one accommodation taken on rent by the employee.
Based on above, I think exemption is available in respect of rent paid for one house only ( City 1 )
Please follow the link below to get opinions from some other experts.
https://www.caclubindia.com/experts/hra-exemption-on-two-rented-house-1207424.asp
Section 10(13A) of Act “any special allowance specifically granted to an assessee by his employer to meet expenditure incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee”
1) Word “occupied” is not further illuminated here but it is common perception that House rent allowance is given by the Employer so that employee can stay close to the office of employers.
2) They have used the word “Residential Accomodation” and not “Residential Accomodation(s). It seems intention is to exempt rent paid for only one accommodation taken on rent by the employee.
Based on above, I think exemption is available in respect of rent paid for one house only ( City 1 )
Please follow the link below to get opinions from some other experts.
https://www.caclubindia.com/experts/hra-exemption-on-two-rented-house-1207424.asp
Message likes :
1 times
12 March 2013
It seems perfectly logical that HRA can be claimed in respect of accommodation in city of employment.
However, i was exploring whether HRA can be claimed against both the accommodations.
It seems perfectly logical that HRA can be claimed in respect of accommodation in city of employment.
However, i was exploring whether HRA can be claimed against both the accommodations.
12 March 2013
I think No, HRA can be claimed only for one accommodation that in city of employment.
Accommodation in City 2 is not "occupied" by the assessee.
There is no provision in Income tax for paying house rent for parents, dependents or any other relatives.
Even he is frequently visiting accommodation at City-2 but it can’t be termed as accommodation “occupied” by the assessee, hence, no exemption available for this house.
Accommodation in City 2 is not "occupied" by the assessee.
There is no provision in Income tax for paying house rent for parents, dependents or any other relatives.
Even he is frequently visiting accommodation at City-2 but it can’t be termed as accommodation “occupied” by the assessee, hence, no exemption available for this house.
12 March 2013
Additionally, HRA can be claimed in respect of only one accommodation taken on rent. Even second house is in same city or in a different city.
12 March 2013
I think clause "c" of rule 2A makes things clear where the following is used-
"where such accommodation is" the usage of such and is making it clear that it is for one accomodation only. Also the distinction between metros and non-metros making it distinct that only one would be possible at a time."
"where such accommodation is" the usage of such and is making it clear that it is for one accomodation only. Also the distinction between metros and non-metros making it distinct that only one would be possible at a time."
12 March 2013
You are right sir.
The word “such accommodation” also makes it clear that there should be only one accommodation.
But Metro and Non-Metro? It is possible that person has taken two rented house in a city defined as Metro
The word “such accommodation” also makes it clear that there should be only one accommodation.
But Metro and Non-Metro? It is possible that person has taken two rented house in a city defined as Metro
12 March 2013
I mean if the act contemplated multiple accommodation, there would be a different formula.
12 March 2013
sir, what do you think? does act consider multiple houses for HRA exemption.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Section 194JA & JB Income which ITR Form to use
- Pass word to open justification report for Q1 for FY 2026-27
- PPF interest-As Exempt Income disclosure
- Under construction property in ITR
- Scrutiny and reopening of past returns
- Booth for sales promotion
- Upload Level ValidationITR3Category of Defect B/D
- Building tax payment deduction in rental Income
- F & O PROFIT REPORTING FOR AY 2026-27
- Difference in GSTR3B system generated which is correct and actual Payment it asks
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
- Delisted shares sold in off market/ Rebate u/s87A
- In Exports Sales HSN details where to fill
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
