House Rent Allowance (HRA) Exemptions and Tax Deductions

How is Tax Exemption From HRA Calculated? 

The deduction accessible is the least of the accompanying amounts: 

a. Actual HRA got; 

b. half (50%) of [basic salary + DA] for those living in metro cities (40% for non-metros); or 

c. Actual rent paid minus 10% of basic salary + DA (Dearness Allowance)

When Do You Need Landlord's PAN? 

In case you have taken a house on rent and are making a payment in overabundance of Rs 1 lakh yearly – remember to give the landlord's PAN. Else, you may miss out on the HRA exemption. The Landlords not having a PAN must be happy to provide you a presentation allude round No. 8/2013 dated 10 October 2013. 

Inhabitants making payment of rent to NRI landlords must remember to deduct TDS of 30% before making the payment towards rent. 

In case your Employer Doesn't Provide you HRA

On the off chance that pay rent for any private accommodation involved by you, however don't get HRA from your employer, you can even now guarantee the deduction under Section 80GG. 

Conditions that must be satisfied to guarantee this deduction: 

a. You are self-employed or salaried 

b. You have not gotten HRA whenever during the year for which you are guaranteeing 80GG 

c. You or your spouse or your minor child or HUF of which you are a member – don't possess any private accommodation at where you currently live, having obligations of the office/employment or carry on business or profession. 

On the off chance that you own any private property at any place other than the resident referenced above, at that point you should not get the advantage of that property as self-involved. The other property would be esteemed to be let out so as to assure the 80GG deduction. 

How to Claim Deduction Under Section 80GG? 

The least of the following will be considered as the deduction under this section: 

a. Rs 5,000 every month; 

b. 25% of adjusted complete income*; 

c. Actual Rent minus 10% of adjusted complete Income* 

*Adjusted Total Income implies Total Income Less long-term capital gain, short-term capital gain under area 111A and Income under segment 115A or 115D and deductions 80C to 80U (aside from deduction under segment 80GG).

Check Out: Income Tax deductions under section 80