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House Rent Allowance (HRA) Exemption – Sec 10(13A)

  1. What is HRA
  2. How to Calculate HRA Deduction
  3. Conditions to be satisfied for claiming HRA deduction
  4. Want your employer to take HRA deduction into consideration and thus deducting lower TDS
  5. Related Documents to Download
  6. How to Claim HRA in ITR
  7. Calculation Examples

What is House Rent Allowance?

House Rent Allowance (HRA) is an allowance paid by an employer to its employees for covering their house rent. Such allowance is taxable in the hand of the employee.
However, Income Tax Act provides a deduction of hra under section 10(13A) subject to certain limits. Self employed individuals are not allowed to take any deduction under this section. Deduction under this section is allowed in same manner for all employee whether central or state government employees or private organisation’s employees.

HRA Deduction Calculation

Use our House Rent Allowance (HRA) Calculator to calculate your annual/monthly exemption available for HRA.

A deduction from such HRA is allowed u/s 10(13A), which is least of the following: –

  • HRA received
  • 40% of salary (50% of the salary if the rented property is in Metro City i.e. Mumbai, Delhi, Chennai or Kolkata)
  • Actual rent paid less 10% of salary

Meaning of salary for HRA exemption calculation

  • Salary includes basic salary, dearness allowance (if it enters into retirement benefits) and fixed percentage commission on turnover achieved by the employee.
  • Salary is taken on the due basis for HRA calculation.
  • Salary is taken only for the period for which House Rent Allowance is received.

Conditions to be satisfied for claiming HRA deduction

  • This deduction is allowed only when rent is actually paid by the employee for his residence purpose. If no rent is paid for any period then no deduction is allowed for that period. Rent receipts may be asked as proof by the income tax officer. No documents are required to be  attached at time of filing ITR.
  • If there is any change in the amount of salary, rent or HRA or city of residence from metro to non-metro or vice versa during the year then such deduction is calculated on monthly basis.
  • Even if rent is paid to any family members, HRA is allowed. There is no legal requirement but it is advisable to pay such rent on monthly basis and through bank transfer. (Bajrang Prasad Ramdharani 2013 ITAT). Also keep in mind that such rent paid to a family member is taxable in hands of such member. However he/she gets standard 30% deduction, so you will be in benefit. (Considering the slabs in which you and family member falls)
  • There is no requirement that employee should not own a house property. If the employee resides in a rented property, he can claim exemption even if he owns a house property in the same or different city.
  • Deduction of house rent allowance, home loan interest under section 24b, repayment of housing loan under section 80C  can be claimed simultaneously.
  • If an employee receives HRA which is allowed as deductible under this section then no deduction is allowed under section 80GG.
  • If maintenance charges are paid separately then no deduction is available for the maintenance charges.

Want your employer to take HRA deduction into consideration and thus deducting lower TDS

  • Form no. 12BB is to be submitted to the employer. If the total rent paid during the year exceeds Rs. 1,00,000 then PAN of the landlord is to be submitted in this form. If there is more than one landlord then details of all landlord are to be submitted.  (Income-tax (11th Amendment) Rules, 2016)
    Form 12BB in Excel Format
  • In case the landlord does not have a PAN, a declaration to this effect from the landlord, along with the name and address of the landlord should be given to the employer. (Circular no. 8/2013)
    Declaration by House Owner/Landlord if he doesn’t have PAN in Word format
  • The employee is exempted from production of rent receipt to the employer, if the house rent allowance is up to Rs.3000/- per month. It may, however, be noted that this concession is only for the purpose of tax-deduction at source, and, in the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent.  (Circular no. 8/2013)

Related Documents

Rent Receipt

Declaration by House Owner/Landlord if he doesn’t have PAN

How to Claim HRA in ITR

  1. Filing ITR – 1 – You will have to directly input taxable salary after all deductions in “Income from Salary/Pension”.

itr-1

Similarly for java utility taxable salary is to be input.itr-1-utility

2. Filing ITR – 2, 2A, 3, 4, 4S – In any of these ITR forms you have to use the Schedule S and feed the exempt portion of HRA in point 2(iii) and the taxable portion on point 3 along with other taxable allowances. Also for the java utility the concept is same.
schedule-s

Calculation Examples

Example
Basic Salary + Dearness Allowance (Rs 1,00,000 * 12)

12,00,000

HRA (Rs 45,000 *12)

5,40,000

Rent of house in Delhi (Rs 30,000 * 12)

3,60,000

Solution
a) HRA received

5,40,000

b) 50% of the salary as the rented property is in metro city

6,00,000

c) Actual rent paid less 10% of salary (3,60,000 – 1,20,000)

2,40,000

HRA Exempt u/s 10(13A) (least of the above)

2,40,000

Other Examples

Case 1 – When salary, HRA and rent of the house is same through out the year and

a) Rented house is located in Delhi, Mumbai, Kolkata or Chennai

Example – 1
Basic Salary + Dearness Allowance (Rs 1,00,000 * 12)

12,00,000

HRA (Rs 45,000 *12)

5,40,000

Rent of house in Delhi (Rs 30,000 * 12)

3,60,000

Solution
a) HRA received

5,40,000

b) 50% of the salary as the rented property is in metro city

6,00,000

c) Actual rent paid less 10% of salary (3,60,000 – 1,20,000)

2,40,000

HRA Exempt u/s 10(13A) (least of the above)

2,40,000

b) Rented house is located in any city other than Delhi, Mumbai, Kolkata or Chennai

Example – 2
Basic Salary + Dearness Allowance (Rs 1,00,000 * 12)

12,00,000

HRA (Rs 45,000 *12)

5,40,000

Rent of house in Jaipur (Rs 30,000 * 12)

3,60,000

Solution
a) HRA received

5,40,000

b) 40% of the salary as the rented property is not in metro city

4,80,000

c) Actual rent paid less 10% of salary (3,60,000 – 1,20,000)

2,40,000

HRA Exempt u/s 10(13A) (least of the above)

2,40,000

 

Case 2 – When salary,HRA and rent of the house are not same through out the year

a) Salary is not same throughout the year and rented house is located in Delhi, Mumbai, Kolkata or Chennai

Example – 3
Basic Salary + Dearness Allowance (Rs 50,000 * 9) for 9 months

Basic Salary + Dearness Allowance (Rs 60,000 * 3) for 3 months

6,30,000

HRA (Rs 40,000 *12)

4,80,000

Rent of house in Delhi (Rs 35,000 * 12)

4,20,000

Solution

Month HRA received 50% Salary Rent-10% Sal HRA Exempt
Apr 4,000 2,500 3,000 2,500
May 4,000 2,500 3,000 2,500
Jun 4,000 2,500 3,000 2,500
Jul 4,000 2,500 3,000 2,500
Aug 4,000 2,500 3,000 2,500
Sep 4,000 2,500 3,000 2,500
Oct 4,000 2,500 3,000 2,500
Nov 4,000 2,500 3,000 2,500
Dec 4,000 2,500 2,900 2,500
Jan 4,000 3,000 2,900 2,900
Feb 4,000 3,000 2,900 2,900
Mar 4,000 3,000 2,900 2,900
HRA Exempt 31,200

b) Salary and HRA is not same throughout the year and rented house is not located in Delhi, Mumbai, Kolkata or Chennai

Example – 4
Basic Salary + Dearness Allowance (Rs 50,000 * 9) for 9 months

Basic Salary + Dearness Allowance (Rs 60,000 * 3) for 3 months

6,30,000

HRA (Rs 20,000 *6) for 6 months

HRA (Rs 40,000 *6) for 6 months

3,60,000

Rent of house in Jaipur (Rs 35,000 * 12)

4,20,000

Solution

Month HRA received 40% Salary Rent-10% Sal HRA Exempt
Apr 2,000 2,000 3,000 2,000
May 2,000 2,000 3,000 2,000
Jun 2,000 2,000 3,000 2,000
Jul 2,000 2,000 3,000 2,000
Aug 2,000 2,000 3,000 2,000
Sep 2,000 2,000 3,000 2,000
Oct 4,000 2,000 3,000 2,000
Nov 4,000 2,000 3,000 2,000
Dec 4,000 2,000 3,000 2,000
Jan 4,000 2,400 2,900 2,400
Feb 4,000 2,400 2,900 2,400
Mar 4,000 2,400 2,900 2,400
HRA Exempt 25,200

c) Salary, HRA & rent is not same throughout the year and rented house is located in Delhi, Mumbai, Kolkata or Chennai

Example – 5
Basic Salary + Dearness Allowance (Rs 50,000 * 9) for 9 months

Basic Salary + Dearness Allowance (Rs 60,000 * 3) for 3 months

6,30,000

HRA (Rs 20,000 *6) for 6 months

HRA (Rs 40,000 *6) for 6 months

3,60,000

Rent of house (Rs 35,000 * 3) for 3 months

Rent of house (Rs 40,000 * 9) for 9 months

4,65,000

Solution

Month HRA received 50% Salary Rent-10% Sal HRA Exempt
Apr 2,000 2,500 3,000 2,000
May 2,000 2,500 3,000 2,000
Jun 2,000 2,500 3,000 2,000
Jul 2,000 2,500 3,500 2,000
Aug 2,000 2,500 3,500 2,000
Sep 2,000 2,500 3,500 2,000
Oct 4,000 2,500 3,500 2,500
Nov 4,000 2,500 3,500 2,500
Dec 4,000 2,500 3,500 2,500
Jan 4,000 3,000 3,400 3,000
Feb 4,000 3,000 3,400 3,000
Mar 4,000 3,000 3,400 3,000
HRA Exempt 28,500

Related Articles – 

7th Central Pay commission (CPC) recommends to reduce the HRA for central government employees – Indiatoday.in

Income Tax Rule

HRA – businesstoday.in

Criteria to get HRA exemption – Financial express

31 comments

  1. Sir,I am a teacher residing in a village and paid Rs. 30000.00 as house rent ,received HRA Rs.29872.00 .My BP+ GP+DA is Rs.812288.00.All payments and receipts annualy. Please tell me whether I can avail total HRA exemption

    • Prateek Agarwal

      Minimum of following amount is exempt
      HRA Received – Rs 29,872.00
      40% of Salary – Rs 3,24,915.2
      Rent Paid minus 10% of Salary – Rs 0.00 (0 in case of negative)

      So you can not claim hra exemption.

  2. Sir,
    I stayed in a rented flat with rent amount of Rs.10,000 per month from April-2016 to September-2016. Then, I changed school of my child, so I shifted to new area in October-2016. I am paying rent of Rs.12,500 per month from October-2016 to March-2017. In summary, I paid Rs.10,000*6 Month=60,000 (From April-2016 to September-2016) and Rs.12,500*6 Month=75,000 (From October-2016 to March-2017). I am getting HRA. Now, how should I claim for HRA ? Will I need to submit PAN card of both landlords ? Appreciate if you can give your valuable suggestion. Thanks.

    • Prateek Agarwal

      Yes, you need to submit PAN card of both landlords in order to claim hra of respective rent paid. You can also calculate deduction of hra month wise with our hra calculator.

  3. SURENDER shastri

    I am a teacher posted in my own village.i have not my own home.i pade 26000 RS annual as house rent.my actual hra as a job is28000 RS.can I claim for hra.

  4. UMESH CH MURMU

    Hello Sir,
    My house rent is 96000 per year,whether the landlord’s PAN submit to be mandatory ?

  5. my house rent is Rs.-96000/year . the landlord has no PAN .What should I do?

  6. Hello,

    My rent is 3,60,000 / year. The landlord does not have PAN. What should I do?

  7. Though Bangalore is a metropolitan city why its not considered for 50% exemption?

  8. My husband is posted in urban area and availing lease facility from his company. i am posted in rural area (appx. 9km away from town) and availing HRA for same house. my query is:
    1. as place of posting of both is different not in same city, but i prefer to travel daily. can i avail HRA from my organisation.
    2. can i avail tax exemption on account of HRA?

    • Prateek Agarwal

      You can avail HRA from company. Availing HRA is not related to your place of residence or whether you are paying rent or not.
      Since you are not paying rent there is no exemption you can claim.

  9. Ashish Khandelwal

    Hi,

    I co-owned house with my friend and paid rent 50% to him. Also i am taking benefit of lnterest from this property. Can i claim HRA as well as i am paying 50% rent to him

  10. Hi Prateek,

    I work in a PSU and I live in staff quarters so I do not get any HRA and also I have to pay licence fee for the quarter, if i dont live in quarter then I get 5000 around HRA , What will be the exempt HRA portion.

  11. dear sir
    one of my friend basic salary no da 19250/- and he is getting 5775/- hra .he is paying 8000/- rent in mumbai. how munh deduction he will get.

  12. Hi

    I have a very specific query in relation to HRA exemption.

    In the Last Financial Year salary was credited to my account for 6 months from April till September. I was on loss of pay from June till September but somehow due to an error HR team was not informed as a result salary for 4 months salary was paid extra.

    After I joined in October I informed my employer of this mistake as a result no salary was credited for next 6 months.

    Now will HRA exemption be given for first 6 months when salary was credited or total 8 months while I was working and not on Loss of Pay ?

    • Prateek Agarwal

      HRA exemption is not allowed on cash basis, in other words the time of receipt of salary is irrelevant. The time period for which salary is received is what matters and thus HRA exemption is allowed for 8 months in your case.

      • Thanks Prateek. I have tried explaining the same to my employer for last few months but to no avail.

        Any idea how can I proceed in such a scenario ?

        • Prateek Agarwal

          Why you want to explain it to employer? So that he deduct a lower amount of TDS.
          The last date of TDS return is gone and most probably he had already deposited tds to government and also filed TDS return. I don’t think even if he get the idea, he will be ready to revise TDS return.
          Best thing is that you file your income tax return and claim TDS in it.

  13. prakash chand jain

    if house rent paid is less then 100000 then rent paid slip is must to enclose with income tax returne

    • Rohit Agarwal

      No document is required to be attach with the Income Tax Return whether you filed it electronically or physically.

      • prakash chand jain

        rent slip is not required and rent agreement is not requiered but my ddo ask me about above then what can i do ? pls send me rule copy.
        thanks

  14. Sanjay agarwal

    Pl let me know what is required documents to get hear deduction in addition to rent slip

    • Rohit Agarwal

      The following document may be required by the employer:-

      1) Rent slip
      2) PAN Card of the property owner
      3) Rent agreement

  15. Please let me know. I am a government employee. Where the amount deducted under HRA, transportation allowance and profession tax can be represented/ shown , while filing e – returns.

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