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It return

Others 402 views 1 replies

Hello friends,

one of my freind is staying as an paying guest an giving Rs.4700/- as an rent,so anyone can guide me how can he claim this for rent exemption to his income tax return and what are the docs required as he have only receipts of rent no agreement deed.

Replies (1)

Option 1 - Deduction u/s 80GG :

Deduction will be lower of the following:

a.  R.s 2000/- per month;

b. Rent paid in excess of 10% of total income (TI) i.e. 4700-(10% of TI); or

c. An amount equal to 25% of TI.

One of the conditions for claiming deduction under this section is that the assesse should not get House rent Allowance from the employer.

Option 2. In case your friend is receiving HRA assuming him to be a salaried employee, then exemtion u/s 10(13A) can be claimed as follows:

Exemption will be lower of the following:

a. Actual HRA received;

b. Rent Paid less 10% of Salary i.e. 4700-(10% of Salary) ; or

c. 50% of Salary if PG in Delhi, Mumbai, Chaeenai or Culcutta ; 40% of Salary if PG at any other place.

Salary for the purpose of HRA calculation includes dearness allowance it the terms of the employment so provide but excludes all other allowances n perquisites.

Either of option 1 or 2 can be excercised at a time depending on the facts.

Hope the above will suffice.


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