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Rent paid

CA.Varalakshmi.M (Manager-Finance) (482 Points)

29 June 2012

Hi friends,

I have been paying the rent of a self occupied house for the whole financial year 2011-12

But I am not employed for the whole financial year 2011-12, I am employed for 8 mnths only.

While calculating HRA,

Do we need to calculate actual rent paid for 12 mnths or 8 mnths

Plz clarify me.

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10 Replies

Tharani Shankar (Public Relations Director ) (51 Points)
Replied 29 June 2012

For the purpose of calculating HRA,

Salary = Basic Pay + Dearness Allowance, if terms of employment provide + Commission as a Fixed Percentage on Turnover.

However, salary is to be computed only for the period during which the accommodation concerned was occupied by the assessee.

For more details refer https://www.accounting-n-taxation.com/Allowances-Exempt.html#Q2

CA NEHA AGARWAL (Practise) (227 Points)
Replied 29 June 2012

For calculating HRA only 8 months will be considered.

1 Like

MD FATIN MOHD. HUSAIN NIZAMI (Accounts Assistant) (60 Points)
Replied 29 June 2012

I agree with neha

1 Like

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 29 June 2012

@ Tharani Shankar

Sir U said

salary is to be computed only for the period during which the accommodation concerned was occupied by the assessee.

But if rented for whole year,and got salary for 8 mnths,while calculating actual rent paid over 10% of salary ,do we take actual rent paid for 8 mnths or 12 mnths

Regards,

CA.M.V.Laxmi.

Varshit Shah (Self Employed) (676 Points)
Replied 29 June 2012

HRA always calculated on a monthly basis. It is to be calculated for 8 months only & not for 12 months.

Varshit Shah (Self Employed) (676 Points)
Replied 29 June 2012

Lets understand this concept in otherway round. Now We are taknig actual HRA recd for 8 months , 50 or 40% of salary for 8 months than how can we take Rent paid for 12 months. It will be totally illogical to consider for 12 months.