Hostel fees paid by employee - allowed for dedn.

Dear Ram,

Hostel fees paid by employee can be claimed for exemption of House Rent Allowance subject to condition that hostel fees consist only rent. But if Hostel fees includes also food or meal. then food or meal charges will be exclude from Hostel Fees. and Rent amount can be claimed for HRA Exemption.

So If hostel fees if Rs. 4000/- and Food charges are 1500/- then Only Rs. 2500/- for rent will be considered for calculaiton of HRA exemption.

CASE -> My wife is working in private organization with salary INR 11 lakhs / year at delhi.  Currently, her company has given her home for which company takes Rs. 4200/- as token amount RENT/month.  Also the company gives HRA  11,700/month.    ( this is unique in company that it gives both HRA and home to employees).    She is not showing any HRA deductions in income tax return.   My wife has one home loan running in her name (this home is in indore city where my parents live). 

at present, I 'm doing full time MBA from an institute in Mumbai. .(1 year MBA)    ..my question is Can I show my hostel fees paid to college ( INR 1 lakh)  in my wife' s income tax  HRA deductions.        technically, hostel fees is equivalent to rent. 

Dear Wasim

Case I-Your wife can claim deduction for HRA under 10(13A).Computed here under

(a)the actual amount received as HRA

(b)excess of actual rent paid over 10% of salary.i.e=Rent paid(for 12months or months for which paid)-10%(Salary* for 12 months or for period which paid)

(c)50% of salary(in case of metros) or 40% of salary (in case of other cities)

after computing the above a,b,c;the lowest amount of the above three can be shown as deduction under 10(13A)

Note:Salary means Basic pay+DA

Case II-You cannot show your hostel rent paid as deduction in your wife's return.Instead you can show it under "your return" under 80GG.Computation for 80GG is shown under.

(a)actual rent paid - 10% of your total income*

(b)25% of total income

(c)Amount actually paid as rent

After computing the above a,b,c;the lowest value of the three can be claimed

Note:Total income here means-the total income arrived at after all deduction under chapter VI-A except 80GG