Save Your Taxes From House Rent Allowance (HRA) | G Bajpai Chartered Accountants in Lucknow

If you live on a rented premise, you can save tax on your total income in the form of the House Rent Allowance (HRA).

Explaining HRA:

-House Rent Allowance can be availed as an exemption by Salaried individuals who live on rented premises and receive HRA from their employer. 

-The salary component which constitutes the rent payment part is allowed as a deduction u/s 10(13A).

-Exemption is the least of the following amounts:

1. Actual HRA received

2. 50% of (Basic Salary+Dearness Allowance), for metro cities

3. 40% of (Basic Salary+ DA), for non-metro cities

4. Actual Rent Paid should be less than Basic Salary+DA

-If you don't receive HRA but live in rented accommodation:

1. You can still avail exemption u/s 80GG.

2. This exemption can only be availed if you/your spouse/your minor child do not own any residential accommodation at the place where you currently reside.

-Deduction u/s 80GG will be the least of the following:

1. ₹5,000 per month

2. 25% of Adjusted Total Income (ATI) 

3. Actual rent should be less than 10% of ATI

ATI= Total Income- Capital Gains- Deductions u/c VI-A (except 80GG)

- Rent paid to parents/ spouse:

1. HRA exemption can be availed provided a legal agreement is entered into between both the parties.

2. There should be regular rent payments.

3. The rental income should be declared as House Property Income in the return filed by parents/ spouse.

Know More

Location: 11th Floor, Wing A, Summit Building, Vibhuti Khand, Gomti Nagar, Lucknow, Uttar Pradesh 226010, India

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