Posted on: June 2, 2011 Author: Sudhir Kaushik
Salaried employees usually face problems related to tax implications in claiming House Rent Allowance (HRA). HRA forms a part of the taxable salary of an individual residing in his own house or in a rented property. The basic idea behind the concept of HRA exemption is to provide the exemption of rent paid by the employees in their taxable salary. It is granted by the employers to their employees.
HRA exemption claim is the least of the following:
- HRA received by the employee
- 50% of salary (in case of metro cities) / 40 % of salary (in case of any other city)
- amount of rent paid over and above 10% of salary
HRA exemption cannot be denied even if the employee:
House Rent Allowance exemption cannot be claimed if:
In order to claim HRA exemption, one should have proper and authentic rent receipts given by the landlord.
Sudhir Kaushik has been a practicing tax consultant for the last 17 years. He is a Fellow Chartered Accountant and conducts seminars in large companies to help salaried employees with income tax and investment queries. Sudhir brings domain knowledge of income tax laws and their compliance difficulties faced by individuals. He is the author of Income Tax Handbook For Salaried Employees for smart financial planning and investments for salaried people. He enjoys an excellent reputation and has a strong network in the corporate sector and public sector undertakings.
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