Dear Seniors, I want know about HRA Details What are the procedure and rule, please any one help me in this..... Regards Pampapati S Executive - HR BVG India ltd.
From India, Bangalore
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From India, Bangalore
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Employees generally receive a house rent allowance (HRA) from their employers. This is a part of the salary package, in accordance with the terms and conditions of employment. HRA is given to meet the cost of a rented house taken by the employee for their stay. The Income Tax Act allows for a deduction in respect of the HRA paid to employees. The exemption on HRA is covered under Section 10(13A) of the Income Tax Act and Rule 2A of the Income Tax Rules. It is to be noted that the entire HRA is not deductible. HRA is an allowance and is subject to income tax.
An employee can claim an exemption on their HRA under the Income Tax Act if they stay in a rented house and receive HRA from their employer. In order to claim the deduction, an employee must actually pay rent for the house they occupy.
The rented premises must not be owned by them. In case one stays in their own house, nothing is deductible, and the entire amount of HRA received is subject to tax. As long as the rented house is not owned by the assessee, the exemption of HRA will be available up to the minimum of the following three options:
1. Actual house rent allowance received from your employer
2. Actual house rent paid by you minus 10% of your basic salary
3. 50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro
This minimum of the above is allowed as income tax exemption on the house rent allowance.
Thanks,
Aparna
From India, Hyderabad
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1An employee can claim an exemption on their HRA under the Income Tax Act if they stay in a rented house and receive HRA from their employer. In order to claim the deduction, an employee must actually pay rent for the house they occupy.
The rented premises must not be owned by them. In case one stays in their own house, nothing is deductible, and the entire amount of HRA received is subject to tax. As long as the rented house is not owned by the assessee, the exemption of HRA will be available up to the minimum of the following three options:
1. Actual house rent allowance received from your employer
2. Actual house rent paid by you minus 10% of your basic salary
3. 50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro
This minimum of the above is allowed as income tax exemption on the house rent allowance.
Thanks,
Aparna
From India, Hyderabad
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Circular No 1-2018 Processing of income-tax returns under section 143(1) of the Income-tax Act .pdf
PENALTIES UNDER INCOME TAX ACT.docx