Asking on behalf of a friend
"Due to certain issues I has to take on rent a house which has a monthly rent of 21000....
My monthly salary is just 28000.....Is this allowed....I was told that the IT department will take action as I am paying more rent than what is allowed based on what salary Iam receiving....Meaning around 10% of salary can go as expense for House rent....If it's more the IT department will call you for scrutiny since your living an expensive lifestyle?"
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Can Rent Be More Than HRA received?
Replies (1)
No issue of how you spend...... but it should be through banking mode and agreement should be legal. The 40/50% of salary is the limit for HRA claim, beyond which it is taxable. Also actual rent paid less 10% of salary received is second criteria.
How much of my HRA is exempt from tax?
The entire HRA received is not always fully exempt from tax. The least of the following three will be taken to exempt from tax:
- HRA received from your employer
- Actual rent paid minus 10% of salary
- 50% of basic salary for those living in metro cities
- 40% of basic salary for those living in non-metro cities
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