HRA Rebate Calculation

House Rent Allowance [ Section 10(13A) & Rule 2A]

Section 10(13A) tells the conditions of House Rent Allowance and Rule 2A tells how much deduction will be given.

House Rent Allowance - Section 10(13A)
Any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee, to such extent as may be prescribed having regard to the area or place in which such accommodation is situate and other relevant considerations.

Explanation.—For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply in a case where—

(a) the residential accommodation occupied by the assessee is owned by him ; or

(b) the assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him.

Condition For Claim HRA

• Meet expenditure actually incurred on payment of rent
• Residential accommodation Occupied by the assesse

Deduction of HRA if

• Occupied by the assesse is owned by him
• Not actually incurred expenditure on payment of rent

As Per Section 10(13A) To Claim House Rent Allowance

• 1- Actual Expenses should be made for
• Rent2- That residential accommodation should be occupied by the assessee.
• He should not be the owner of that house

If these three conditions are fulfilled then House Rent Allowance can be claimed.

How is Tax Exemption from HRA calculated?

The deduction available is the least of the following amounts:

Actual HRA received

50/40% of [basic salary + DA]

Actual rent paid (-) 10% of basic salary + DA

50%for those living in metro cities (Delhi, Kolkata, Mumbai or Chennai)

40% of [basic salary + DA] for those living in non-metros

DOCUMENTS REQUIRED FOR HRA EXEMPTION CLAIM

Below is a list of documents required to claim HRA exemptions:

Copy of the landlord’s PAN card [if Rent is More than 1 Lakh Annually  ]

Rent receipts for the concerned financial year

Copy of the rent agreement

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