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Here we bring to you, our HRA Exemption Calculator, which makes HRA calculation handy and tells you about the HRA Exemption, you are eligible for.
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An individual can claim House Rent Allowance HRA, by doing this they can easily pay their rent and the related expenses. Salaried individuals who live in a rented house can claim HRA exemption, by this, they can increase their tax deduction and can get some relief from paying taxes on their taxable income. A salaried individual can get full or partial HRA exemption, for getting this exemption he/she must present all the required documents to the employer, including the rent receipts, which is a proof of actual rent paid by the individual.
If a salaried individual is staying in a rented apartment, in a metro city, then 50% of his/her basic salary is exempted based on tax slabs. For the individuals, who stay in a non-metro city, 40% of the basic salary is exempted from the IT rate slabs. If a person receives HRA from his/ her employer, then it is exempted from taxes.
As per section 10(13A) of the Income tax act 1961, an individual can do HRA exemption calculation, when you reduce 10% of your total salary from the actual rent paid. If an individual gets House rent allowance and he/she does not live in a rented apartment, then the actual HRA received by the individual will be completely taxable.
You will not require any documentary proof if your House Rent Allowance claim is up to Rs. 3000 per month. If the claim amount exceeds, the limit of Rs. 3000 per month then you have to produce certain documents as proof of rent payment.
The Rent Receipts:A completely filled rent receipt with all the required details, which include residence address, landlord’s name, the rent amount, signature of the landlord which is used as a verification of the rent accepted by him/her. You need to put a Rs. 1 revenue stamp on the rent receipt.
Rental agreement in some cases: If the monthly rent exceeds the amount of Rs. 15000 per month or Rs. 1lakh a year, then in that case PAN Details of the landlord must be produced for claiming the House Rent Allowance exemption.
If an individual pays interest for a home loan and he/she enjoys tax benefits on the interest of the loan, in that case also an individual can take HRA benefits provided to him/her by his/her employer. This is applicable when the employee owns a property, but has rented out that accommodation to someone else while he/she is living in a rented apartment, which belongs to someone else.
In such a situation, the employee can earn from his own property while benefiting from HRA policy which eventually lessens his/her burden of paying rent for the house he has occupied.
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