The HRA component in my friend's salary is Rs 498750. His basic is 997500 and there is no DA component. He lives in metro city and is thinking of claiming HRA exemption by showing rent to his parents.
How much rent should he show in order to claim as much HRA exemption as possible?
How to avoid any scrutiny from income tax department in this case?
What should he do to ensure that he doesn't face any issue in case of scrutiny by IT department?
@ sabyasachi mukherjee I know the calculation for HRA exemption. I can get exemption on the complete HRA in my case. My question is how much should I claim so that I don't fall under scrutiny. Even if I get scrutinized, what things should I take care of now so that I don't face any issues later. For e.g, on scrutiny, can It department ask for rent payment proofs? Can I say that I paid all rent in cash. If no, then I should ensure to transfer monthly rent to my parents from now on. Any other similar things I need to be mindful of?
CAclubindia
