Reg HRA deduction

Tax queries 810 views 5 replies

My husband was working in a firm in chennai last year.he switched over job in jan 2011. in between he had taken a break for shifting and holiday of 3 months. He was not recieving any salary for 3 months. While computing tax for him on assessment of HRA deduction how do i take. Should i take 40% basic for 9 months of last company or 6months of last company.We still payed rent for those 3 months when he did not earn any salary. for the 3 months in new company shall take basic from new salary. we have shifted to delhi from chennai. Please assisst.Urgent

Replies (5)

  The exemption of HRA will be available up to the the minimum of the following three options:

  1. Actual house rent allowance received from your employer
  2. Actual house rent paid by you minus 10% of your basic salary
  3. 50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro

This minimum of above is  allowed as income tax exemption on house rent allowance.

 

 

As you are living metro cities you have to calculate 50% of your husband's basic salary.

 

 

 

 

Meaning of Salary for calculation the exemption of HRA

 

  • Salary means (Basic + D.A + Commission based on fixed percentage on turnover).
  • Salary is to be taken on due basis in respect of the period during which the period accommodation is occupied by the employee in the previous year.

Thanks for your reply.But he was not earning for 3 months. Can i still take 50% of basic of old company or new company or should i leave those 3 months and take only 9 months? We were paying rent in those 3 months.Please guide me

Originally posted by : jayanthi

Thanks for your reply.But he was not earning for 3 months. Can i still take 50% of basic of old company or new company or should i leave those 3 months and take only 9 months? We were paying rent in those 3 months.Please guide me

 Apply the formula mentioned by Vishnupriya on monthly basis for the period of Job. u might have paid rent for 3 months when your Husband was not working, but one of the condition is HRA received. As during those three months of ur husband has not received any HRA from any Company, calculation of lower of Above Three Criteria (mentioned by Vishnupriya) will be zero. So u will get benefit of 9 months only.

Thank You. Calculated and filed returns. Thanks to all for your assistance

I am in Hyderabad and my HRA is 60 % of my basic salary.Am stating in own house.How much exemption can I claim ?


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