26 July 2012
An employee gets HRA and stays in a rented house.However, before calculating employee's tax liability for a particular financial year,no declaration was obtained by the employer ,whether he stays in his own house or rented accomodation?Can the employee while filing the IT Return,re-calculate his net-tax liablity by considering deduction for HRA U/s 10 (13)of the IT Act and claim the said relief?The employee has a copy of the registered lease-deed executed with his landlord and for his residence-proof gave the same to the employer while joining the said organisation and the said address is appearing in employer's record.
Extracts of "Explanation to Sec 10(13A)-(Which says HRA exemption is not available if the assessee is staying in his own house.)
Section 10(13A) exempts from tax only the allowance granted by the employer to meet expenditure already incurred on payment of rent for the residential accommodation occupied by the employee. The limits for the purposes of exemption of house rent allowance under section 10(13A) have been laid down in rule 2A. Though for purposes of grant of house rent allowance, a rent receipt may not be insisted upon by Government, it is necessary for granting the exemption under section 10(13A) that the employee should have actually incurred the expenditure on rent. For purposes of deduction of tax, therefore, the disbursing officer should ensure that the employee concerned has in fact incurred the expenditure on rent. The payment of rent should be verified through rent receipts in the cases of all employees.
Conclusion: If you are in the receipt of HRA and you have the rent receipts....Then u can recalculate your tax liability.
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