House rent allowance or HRA is a tax exemption available to individuals as part of their salary package. The HRA component can be claimed only when the taxpayer has actually paid rent for the residential accommodation.
It’s not necessary that you may be able to claim the full HRA amount. The amount you can claim as exemption will be the lowest of the following: a) HRA amount in CTC, b) 50% of the addition of basic salary, dearness allowance (DA) and other commissions (basic+DA+commissions) for those living in metro (40% for those in non-metros) and c) rent paid minus 10% of basic+DA+commissions. Any amount exceeding the calculated amount, either in the form of remaining HRA or excess rent paid, will be added to your total income for taxation. HRA can be claimed by paying rent to parents or spouse if you do not have any ownership in the house.
Deduction under Section 80GG for non-salaried people is the least among — a) ₹5,000 per month, b) total rent paid deducted from 10% of basic salary and c) 25% of total taxable income after claiming tax deductions under 80C to 80U, long and short-term capital gains, and income from dividends.This is to be claimed while filing Income Tax Return (ITR).
Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
MoreLess