House Rent Allowance is a component of the salary provided by the employer to his/her employee. If you receive HRA as part of your salary and you live in a rented accommodation, then you can claim full or partial HRA exemption u/s 10. However, HRA is fully taxable if you don’t live in a rented accommodation.
How to calculate HRA?
Your HRA depends upon the following 4 factors. They are:
HRA is one of the most common component of a salary structure and hence, you must claim the same where you are staying on rent. If you are not staying on rent and living with your parents, it is important you analyse the overall family's taxability before declaring that you are paying rent to your parents.
- Salary
- HRA component
- Rent Paid
- Location of your rented house
- You should be self-employed or salaried
- You have not received HRA at any time during the year for which you are claiming 80GG
- You or your spouse or your minor child or HUF of which you are a member – do not own any residential accommodation at the place where you currently reside, perform duties of office, or employment or carry on business or profession.
- Rs 5,000 per month;
- 25% of adjusted total income*;
- Actual Rent less 10% of adjusted total Income*
Date : ________________Place : ________________ | (Name of the declarant) |