Hra exemption

A. HRA

Exemption for HRA u/s 10(13A) and rule 2A will be least of the following :

1. 40% of Basic Salary (for states other than Bombay, Calcutta, Delhi or Madras) = 34750*40% = Rs. 13900/- pm

2. HRA received = Rs. 17375/- pm

3. Rent paid - 10% of Salary = 15000-(34750*10%) = Rs. 11525/- pm

Hence, Taxable HRA = 17375-11525 = Rs. 5850 pm

B. Dec u/s 80C

Rs. 150000/-

C. Dec u/s 24(b)

It depends upon the nature of property i.e self-occupied/vacant/let-out & the dates of possession.

Post possession interest, from the financial year (FY) in which possession is taken, is allowed in its entirety if the property is let - out, else it is subject to a max of Rs. 200000/- from AY 16-17 onwards. Pre possession interest, uptill the FY immediately preceeding the FY in which possession is taken, is allowed in 5 equal installments from the year since the possession is taken.

Regards

CA Shivani Mittal

Hi Shivani,

Thanks for your quick response. :)

The house for which loan is taken is self occoupied.

Just for confirmation, as per my understanding.

1. 40% of Basic Salary (for states other than Bombay, Calcutta, Delhi or Madras) = 34750*40% = Rs. 13900/- pm

2. HRA received = Rs. 17375/- pm

3. Rent paid - 10% of Salary = 15000-(34750*10%) = Rs. 11525/- pm

Hence, Taxable HRA = 17375-11525 = Rs. 5850 pm 

Annual Exemption will be (11525 * 9= 103725)

for 80c exempetion will be 150000

for 24b it will be 2,00,000

are the above calculation correct?

Now what my organization is doing 

 Rent paid - 10% of Salary = (15000*9)-(34750*12*10%) = 93300 (annually)

that is - 9 months rent paid minus 10% of 12 months Basic salary

Is this approch right ?
 

In my opinion, salary should be taken for 9 months (basis rule 2A). Accordingly, your calculation is right.

Ded u/s 24(b) will be = 150000+ (1/5*180000) = Rs. 186000/-  and not Rs. 200000/-. (Assuming that, interest for whole FY in which possession is taken is a part of Rs. 150,000/-)

Can I claim and exemption of Rs 2,00,000 under section 24b as the home loan start date and the possession date are of the same year.

does that have anything to do with 'HRA, I employer is exempting ony 70K and saying you cant claim HRA nd interest benefits both

HRA and home loan are independent factors. Both can be claimed.

Assuming the year to be a financial year and not calendar year, which means that interest paid is Rs 150000+180000 = Rs 330000/- during the relevant FY. Hence, ded u/s 24(b) will be 200,000/-

Thanks a lot for the clarification 

Welcome :)