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Tax rebate on hra (house rent allowance)

Anil Chaudhary (Software Developer) (80 Points)

02 February 2013

Can anybody please explain me how to calculate rebate in income tax payable due to paying house rent as per income tax rules in India? Here is my case

I'm salaried person my gross salary of Rs. 25,000/month. I spend Rs 4,000 per month as house rent and my current city noida(is noida metro city ?) then what will be the income tax payable for the financial year 2012-13 ?

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5 Replies

Vaisakh Ayyappan Prakash(VAP) (student) (474 Points)
Replied 02 February 2013

please give HRA information

Dhruvi N suthar (Account Executive) (303 Points)
Replied 02 February 2013

- Actual house rent allowance received from your employer

- Actual house rent paid by you minus 10% of your basic salary

- 50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro

Out of above three which ever is less,alloweded as deduction

*Salary means (Basic + D.A + Commission based on fixed percentage on turnover).

*Metro City :Delhi, Mumdai, Calcutta & chennai

*You need to submit proof of rent paid through rent receipts, for which only two need to be submitted, one for the beginning of the year and one towards the end of the financial year. It should have a one rupee revenue stamp affixed with the signature of the person who has received the rent, along with other details such as the rented residence address, rent paid, name of the person who rents it etc.

Akash (CA Final Article Assistant) (1671 Points)
Replied 02 February 2013

Noida is not Metro City.Only Delhi,Kolkata,Mumbai and Chennai qualify as Metro City

Any taxpayer who is getting HRA allowance from the employer and is paying rent for his residential purposes can claim HRA exemption as least of the following 3 amounts:

a. HRA Received

b. Rent paid less 10% of salary

c. 40% of salary (as the case may be).

Salary includes Basic + D.A.

Dhruvi N suthar (Account Executive) (303 Points)
Replied 02 February 2013

Hi Anil,

Please mentioned how much amt you received as HRA in your salary bifurcation.

so that it is easy clarify more.

manoj (student) (5205 Points)
Replied 03 February 2013

IF YOU ARE NOT GETTING HRA DEN U CAN ALSO CLAIM DEDUCTION

Deductions is respect of rents paid (Section 80GG):

Section 80GG allows the employee to a deduction in respect of house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions :-

(a) the employee has not been in receipt of any House Rent Allowance specifically granted to him which qualifies for exemption under section 10(13A) of the Act;

(b) the employee files the declaration in Form No. 10BA.

(c) He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income, subject to a ceiling of 25% thereof or Rs. 2,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under section 80GG.

(d) The employee does not own:

(i) any residential accommodation himself or by his spouse or minor child or where such employee is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or

(ii) at any other place, any residential accommodation being accommodation in the occupation of the employee, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be.

The Drawing and Disbursing Authorities should satisfy themselves that all the conditions mentioned above are satisfied before such deduction is allowed by them to the employee. They should also satisfy themselves in this regard by insisting on production of evidence of actual payment of rent.