HOUSE RENT ALLOWANCE (HRA) Sec.10 as well as Sec 80(GG) Explain

HOUSE RENT ALLOWANCE 

(HRA) Sec.10(13A) as well as Sec 80(GG) Explain. 

HRA exemption is provided by the Income Tax Act. for the help of minimize the tax liability to Salaried individual (both private & public sector), and the self employed people and Professional.

How much is exempted?

The exemption for HRA benefit is the minimum of


i) Actual HRA received                                                                                         XXX


ii) 50% of salary if living in metro cities, or 40% for non-metro cities                  XXX


iii) Excess of rent paid annually over 10% of annual salary                                XXX

                Minimum of the above                                                                                      XXX

(As per Income tax current metro city -Delhi, Mumbai, Chennai and Kolkata)


Calculate HRA with the Income tax web of the government. 

https://www.incometaxindia.gov.in/Pages/tools/house-rent-allowance-calculator.aspx

Important Documents

• HRA exemptions can be availed only on submission of rent receipts or the rent agreement with the house owner.

• It is mandatory for the employee to report the Pan Card of the 'landlord' to the employer if the rent paid is more than Rs 1,00,000 annually.
• Name of the tenant
• PAN detail of the landlord
• Address 
• Revenue stamp
• Rent agreement 
• duration of stay.etc.

Section 80 (GG)

Individuals who don't get HRA but pay rent

There may be some employees who might not have HRA component in their salary structure. Also, a non-salaried individual might be paying rent. For them, Section 80 (GG) of the Income-tax Act offers help.

Limit :- 
The least of the following is available for exemption from tax under Section 80GG:

(i) Rent paid in excess of 10% of total income                                   xxx

(ii) 25% of the total of the total income*                                             xxx

(iii) Rs 5,000 per month                                                                     xxx

Least of the above HRA exemption                                                  xxx

 

(*Adjusted Total Income means Total Income Less long-term capital gain, short-term capital gain under section 111A and Income under section 115A or 115D and deductions 80C to 80U (except deduction under section 80GG).