benefit of section 10(13A) on arrear HRA
This query is : Resolved
20 July 2010
Can the employer provide benefit of section 10(13A) on arrear HRA if the employee has surplus/ unavailed balance of (actual Rent paid Less 10% of Salary)? For this off course 10% of salary will be recasted by the employer based on arrear basic. Is it legally ok?
20 July 2010
No HRA is calculated for a year only.
20 July 2010
agreed with the expert. If you go through Section 10(13A) properly then you will find that exemption for arrears on HRA is not available.
20 July 2010
Dear Aditya & Shudhangsu,
the fact that we are going to recompute the benefit of section 89(1). For F.Y 2009-10, employees have received arrear basic, arrear hra, in F.Y 2010-11 as well as arrear PTAX and PF was adjusted from their income. Now to calculate benefit of section 89(1) for the year 2009-10 we have to calculate the tax liability of employees by adding this income component along with their old income, to do so can the employer recast the deductible part of section 10(13A) since many of the employees rent paid portion is more than 10% of salary.
the fact that we are going to recompute the benefit of section 89(1). For F.Y 2009-10, employees have received arrear basic, arrear hra, in F.Y 2010-11 as well as arrear PTAX and PF was adjusted from their income. Now to calculate benefit of section 89(1) for the year 2009-10 we have to calculate the tax liability of employees by adding this income component along with their old income, to do so can the employer recast the deductible part of section 10(13A) since many of the employees rent paid portion is more than 10% of salary.
20 July 2010
As per Section 10(13A) HRA exemption is available on due basis of salary for the relevant Previous Year. If you are calculating deduction u/s 89(1) then also according to me exemption u/s 10(13A) will not be allowed for arrear HRA received
21 July 2010
Dear Shudhangsu,
So, can it be then summarized that on arrear hra, at the time of computation of benefit of section 89(1), no benefit under section 10(13A) given either in the year of receipt i.e 2010-11 or in the year of accrual 2009-10. Is my understanding correct?
So, can it be then summarized that on arrear hra, at the time of computation of benefit of section 89(1), no benefit under section 10(13A) given either in the year of receipt i.e 2010-11 or in the year of accrual 2009-10. Is my understanding correct?
21 July 2010
yes...until and unless provision entry is passed by the employer on 31st March of the relevant year because in this case salary will due on March 31 and hence exemption can be claimed
21 July 2010
Provision entry passed in 31st March 2010, but arrear HRA actually disbursed to the employees in April 2010 in that case can the deduction of section 10(13A) be claimed both in the year of receipt (2010-11) and year of accrual (2009-10) or any particular year?
21 July 2010
If they relate to the F.Y. 2009-10 then exemption can be taken in the A.Y. 2010-11 on accrual basis u/s 10(13A).
You know that if once exemption is claimed it can not be claimed again. So on receipt of HRA exemption will not be available.
You know that if once exemption is claimed it can not be claimed again. So on receipt of HRA exemption will not be available.
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