I have paid partial rent for one month however I received full month HRA and basic pay for that month.
Should my HRA and Basic pay to be pro- rated to calculate the HRA exemption as I paid partial rent for that month.
Really looking forward to read more. Keep writing.
House rent allowance is a component of salary which is exempt from tax under Section 10(13A) of the Income Tax Act. This exemption is available only if the employee is paying rent to a landlord. The exemption is allowed up to a maximum of 50% of the salary or Rs. 60,000 whichever is lower. The amount of exemption allowed is the least of the following three:
1. 50% of the salary
2. Actual house rent allowance (HRA) received
3. Actual rent paid minus 10% of basic salary
So, if you are paying partial rent to your landlord, then you will be eligible for the exemption up to the amount of rent paid. However, you must ensure that you meet all the criteria, including furnishing the necessary rent receipts, to avail of the exemption.
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