Hra deduction for both husband and wife?

Tax queries 5198 views 2 replies

Both my wife and myself are working and live in the same rented premises. We pay the rent to a single property Owner through two transactions of Rs 15,000 + Rs 6000 = Rs 21,000/- per month. The rent is paid through a joint account held by both of us. My wife gets HRA exumption of approx Rs 14,000/- . Can I claim the balance rent paid as exempt income under HRA? My salary also has HRA component. 

Replies (2)

Dear Sir,

HRA exemption is given based on the rent reciepts. If landlord gives you either two separate rent receipts or only one receipt specifying the amount or proportion paid by each, then both of you are entitled for HRA exemption according to the amount of rent paid.

So you can claim the balance amount as HRA exemption provided you should show in your rent receitps that you have paid such amount. 

Dear Mr. Shiv,

HRA is an allowance and hence taxable. However, you can claim exemption u/s 10(13a) of Income tax act. The deduction is available as least of the following three:

a. HRA Received.   OR

b. Actual rent paid minus 10% of basic salary*   OR

c. 50% of basic salary if you the premises is located in a metro city, 40% if in non-metro city.

 

Salary here means basic salary which  includes dearness allowance if the terms of employment provide for it, and commission based on a fixed percentage of turnover achieved by the employee.

 

In your case, you and your wife are jointly contributing for payment of rent. Hence for availing deduction as per point (b) above, your respective rent share out of the 21,000/- paid could be considered for claiming deduction. For eg: if your wife's basic salary is 10,000/- p.m and she contribute Rs. 12,000/- per month out of Rs. 21,000/-, then HRA deduction shall be calculated as follows:

 

a. HRA Received = Rs. 14,000

b. Rent paid = 12,000 - 1,000 = 11,000/- (10% of 10,000)

c. 50% of 10,000 = 5,000./-

 

Rs. 5,000 being least of the following is deduction u/s 10(13a).

 

The balance rent of Rs. 9,000 which is paid by you as per above example, could be considered by you while calculating HRA deduction in the same manner as above.


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