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HOUSE RENT PAID

sanjeev (business analyst) (26 Points)

03 July 2009

Hi,

I have the following questions.

1. Can i not claim house rent paid if i am working for private limited company. 2.The accounts guy in my company says House Rent Paid can only be claimed if i am working for a public limited company. Is it true.

Thanks in advance.

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6 Replies

sudhir gautam (CA Final) (145 Points)
Replied 03 July 2009

Under IT act it is does not matter that you are working in private limited or any other .The eligible amount of deduction is computed like this.1. House rent actually received 2. 50% for Delhi Mumbai Kolkatta and cheenai and 40% for rest of the india of Basic salary plus comission if terms of employment warrants.3. Excess of 10% of salary over rent paid. which ever is lower will be deducted from house rent allowance received. And Under section 80GG what ever paid but not more 2500 per month or 20% of salary which ever is lower

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sanjeev (business analyst) (26 Points)
Replied 03 July 2009

Sudhir,

Tahnks for your reply. I didn't quite understand you reply. The HRA in my salary component amounts to 10,500 PM. I am paying a rent of 8,500 PM. If i mention that i am paying a rent of 8500 in my tax declaration will i save tax? I live in hyderabad. I have also declared the below. LIC - 25000 and Medical - 15,000.

Murali dhar (coordinator) (54 Points)
Replied 21 July 2009

hai,

Salary employees can be claimed HRA exemption irrespective of Private and Public.

1. 10% salary- rent paid

2.40% of Salary or 50% salary( in DMCC)

3.Actual rent paid

which ever lower can be claimed exemption. ie. this amount to be decucted from HRA.

Abhishek Mohta (ACON) (508 Points)
Replied 21 July 2009

Definitely you will save tax. The accountant who told you that you cant claim exemption of rent paid has got it wrong. The act says if a salaried employee is getting HRA as his salary component then the employee can claim exemption of the least of the following three components from the amount of HRA received:

1. Actual HRA received

2. as you stay in Hyderabad 40% of your BAsic + DA (if included in retirement benefits)

3. Rent paid in excess of 10% of Salary (Salary means Basic + DA)

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edwardraj (ACCOUNTS MANAGER) (34 Points)
Replied 25 November 2010

PLEASE SOME ONE HELP ME , I AM AN ADVOCATE, I AM IN RENTED HOSE PAYING RS 5500/- P MONTH, AND MY OWN HOUSE I HAVE RENTED OUT FOR RS 9000/- , WHILE FILING FORM IV HOW RENT PAID AND RECEIVED SHOULD BE TREATED