Hra query

Firstly it should not be deducted and secondly you should get HRA benefit..

Dear Mr. Shah,

Thanks for the prompt reply.

Could you please clarify in your statement what should not be deducted?

Since my employer is not ready to pass me HRA benefits, are there some links to circular that I can share with my employer to take my case with them?

Thanks in advance.

Regards,

Shishir

You need to salary structure. If your salary structure include the HRA then you will get the benefit of HRA deduction as per the provision of INcome Tax Act.

You have stated that rent is paid by the employer directly and then it is recovered from salary. It shows that rent paid by employer is on behalf of you. Hence HRA benefit should be available to you.

Please check your salary structure if HRA is there then you can take benefits.

rent should not be deducted from your salary...

That's the way it is in my organisation. Rent is deducted from my flexible benefit package (FBP) from this FY and will be given to the landlord. For the purpose of tax calculation 15% of salary or Annual Rent (whichever is less) is calculated as perquisite value which is taxed at the hands of employee. Obviously, no HRA benefits will be given to employee. 

Hi,

Basically, your company has adopted a 'structured salary' approach for its employees. You are provided a 'Company Leased Accommodation' and not a HRA benefit. Therefore, the rental is adjusted against your flex benefits and a notional 15% of the salary is considered a 'perquisite' value. This, if you are at the highest tax slab (30%) would be like 5% on the rentals. Generally, this works for the benefit of the employees vis-a-vis HRA for tax.

Cheers

Yes, I am in the highest Tax Slab of 30%. 

Now I pay Rs. 17,000/- as rent pm.

For a year it makes, (17000X12 = 204000)

Assuming 15% of my annual Salary (taxable salary) is higher that the Annual Rent (Rs 204000), it means that 30% of 204000, which is Rs. 61200 will go as tax. 

This is a huge tax outgo considering I have done all the calculation correctly. Please confirm.

Would claiming HRA be more beneficial in my situation? My employer says if I have personal Lease (instead of CLA) I can claim HRA.

Can a expert throw some light on this?

Thanks in advance.