Home INCOME TAX How to Calculate House Rent Allowance? HRA Exemption-HRA Rules |Section 10(13A)

How to Calculate House Rent Allowance? HRA Exemption-HRA Rules |Section 10(13A)

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Here, You Learn about HRA Calculation, how to claim HRA Exemption, HRA Rules, and HRA calculation for AY 2018-2019 and Know more about HRA read our Article.

How to Calculate House Rent Allowance | HRA Exemption | HRA Rules |Section 10(13A)
Here, You Learn about HRA Calculation, how to claim HRA Exemption, HRA Rules, and HRA calculation for AY 2018-2019 and Know more about HRA read our full article.

What is HRA?
If you live in Rental accommodation, than you can claim HRA Exemption as per section 10(13A) read with rule 2A of Income Tax Act,1961. However, if you don’t live in a rental accommodation than HRA is fully taxable.

Generally, House Rent Allowance (HRA) is Receive as a part of salary given by the employer to his/her employee.

In addition, if The Assessee is claim HRA Exemption under section 10(13A) than  as a result of these, Assessee is not eligible to claim deduction under section 80GG in respect of Rent Paid.

Here, You Learn about HRA Calculation, how to claim HRA Exemption, HRA Rules, and HRA calculation for AY 2018-2019 and Know more about HRA read our Article.

How to Calculate House Rent Allowance

Least of the following amount is exempt from tax in respect of House Rent Allowance (HRA) as per section 10(13A).

1.50% of salary, if the house taken on rent is situated in Mumbai, Delhi, Chennai, Kolkata; (40% of salary, in any other case); or
2.Actual HRA or
3.Rent paid as reduced by 10% of Salary.

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HRA Exemption | HRA Rules

For the purpose of HRA Calculation, Here, the term “SALARY” includes Basic salary and Dearness allowance (only if it forms part of salary for computation of retirement benefits) and Commission based as a fixed percentage of turnover achieved by the employee.

Here, the salary shall be determined on Due basis for the period during which rental accommodation is occupied by the employee.

The exemption shall be calculated month-wise and then aggregate for the whole year.

HRA Exemption under this section shall not be available, where an employee lives in his own house or in a house for which he does not pay rent.

Where the employee and his wife were living together and he claimed exemption of rent paid by him to his wife, it was held that as the assessee had submitted the rent receipts and the payments had been duly verified, he was entitled to exemption u/s 10(13A). He had fulfilled both the requirements i.e. occupation of the house and the payment of rent.

Similarly, you also check another post “What is a Lease? -Types of Leasing | Operating Lease v/s Financial Lease |

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