Is My Employer Right to Limit HRA Exemption to Submitted Receipts Only? Seeking Advice!

Hello All,

My employer is considering HRA exemption for tax calculation for only the HRA receipts that I've submitted, i.e., HRA exemption is not being projected for the rest of the year. So, I was wondering if it is NOT statutory to calculate HRA exemption for the entire year or is this exemption calculation governed by HR policies of the organization.

Thanks in advance for any advice that you can offer.

Regards,
Rajesh.

Dear Rajesh,

In all good companies, including the 6 or 7 I have worked in over the last twenty-three years, the receipt is normally requested for the first and last months of the year/period for which tax is calculated; i.e., April and March of the next year for the period April-March. Just provide receipts for these two months, which indicate the rent paid for the period.

For your information, good company accounts departments are sometimes not very strict even if you do not provide a receipt; they can manage with your declaration only. With the changing times, accounts departments have become more supportive and also more particular, depending on your luck and the type of accounts people you come across.

Regards,
Sanjeev

Dear Sanjeev,

Many thanks for taking the time to reply.

From your response, I gather that there is no legislation regarding the HRA exemption projection, and it is up to the employer to decide whether the HRA exemption should be projected or not. Is that correct?

Thank you.

Regards,
Rajesh.