NEW DELHI:
House Rent Allowance
(
HRA
) is an important component of your salary structure and the best thing is that it’s not entirely taxable unlike the basic salary.
Under the Section 10 (13A) of the Income Tax Act, a part of HRA is exempted depending on specified set of rules and regulations.
Self-employed individuals and salaried employees, who don’t receive any HRA, can claim the benefits of the said component under the section 80GG of the Income Tax Act.
HRA deductionsUnder the Income Tax Act Section 10-13A, HRA exemptions are allowed:
1) The actual amount of HRA received by the employee
2) 40 per cent of the basic salary if residing in non-metro cities
3) 50 per cent of the basic salary if residing in metro cities like Chennai, Kolkata, New Delhi &
Mumbai.
4) In case rent amount exceeds HRA, the actual amount of rent that is paid by the employee, after subtracting 10% of her/his basic salary.
Proof of HRA claim
1) If the total amount claimed by you as HRA is up to Rs 3,000 per month, you don't need any proof, just declaration is enough.
2) If the total amount claimed by you is between Rs 3,000 to Rs 8,333 per month, you need to submit rent slips with signature of landlord on it.
3) If the rent amount is more than Rs 8,333 per month, you will require to submit - Rent receipts, PAN number of landlord. In case, your landlord does not have a PAN number, then you need to attach a declaration from the landlord on plain paper citing the reason for not having PAN. Your landlord’s address and phone number have to be mentioned too.
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