Hra exemption

This query is : Open

Rahul Mehra (Querist)
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06 January 2014 Dear Sir,

BASIC SALARY = 6600 X 12 = 79200
HRA REC FROM COMPANY = 4036 X 12 = 48432

PAID HRA = 4500 X 12 = 54000

Then how amount can i take exemption under 80 c. 2000 per month or not exceed 2000 x 12 = 24000/-.
This is right or some else.

Regards,
Rahul Mehra

Anumanchipalli Sathikonda

Anumanchipalli Sathikonda (Expert)
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06 January 2014 Mr.Rahul Mehra

You are mistakening Section 80GG for Section 10(13A) of Income-tax Act, 1961. The exemptions u/s 80GG is not available for the people who are in receipt of HRA.

Please note that the exemption for HRA can be claimed u/s 10(13A) but not u/s 80C.

I presume that Padi HRA = 4500 X 12 = 54000 is the rent paid by you.

As per the provisions of section 10(13A) the least of the following three amounts is exempted.
(i) Actual HRA received by the employee
(ii) The difference between the rent paid by the employee over 10% of his salary.
(iii) 40% of the salary.
Please note that for the people who live in Mumbai, Kolkata, Delhi and Chennai the 50% of the salary is considered.

The employee is eligible for exemption if he/she does not own any house and the HRA received by him is actually spent towards rent.

Best Wishes

SathikondaA