Hra claim

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 February 2013 A Employee Joined in Month of June 2012.
So Salary for 10 Months Paid.
Earlier He was Unemployed.

Now Tell me Can He Claim HRA for First Two Months.??? though not paid but he paid rent though he was unemployed.

Since Formula is:-

>Actual HRA received : - (Company paid Will Come for 10 Months)

> Rent Paid (12 Months Will Come) - 10% of Salary (of 10 Months Only)

> 50% of Salary (of 10 Months)

kunal

kunal (Expert)
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16 February 2013 in my view rent paid should be taken for 10 months only
thanks!

Querist : Anonymous

Querist : Anonymous (Querist)

16 February 2013 I Think Its Contradictory Part:-

10 (13A) Says for Per Annum calculation.
No Where said for Per Month Basis.

But There are Two Conditions to Claim HRA:-
1. Must Getting HRA from Employer.
2. Must Paying rent.

Both Conditions are Not Fulfiled in these two Months.

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CA Himanshu Kansal

CA Himanshu Kansal (Expert)
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16 February 2013 Completely agree with the above view that two conditions must be satisfied i.e. must getting salary during that period and must paying rent during that period.
Therefore Exemption u/s 10(13A) should be for least of the following:
a) Actual HRA received (i.e. for 10 months);
b) Actual Rent paid (for 10 months)- 10% of salary
c) 50% or 40% of salary (which ever is applicable).

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 February 2013 I might be giving an aggressive advice here, but I disagree with all the view mentioned above.

Section 10(13a) states as follows

"any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee, to such extent as may be prescribed having regard to the area or place in which such accommodation is situate and other relevant considerations.]

Explanation.—For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply in a case where—

(a) the residential accommodation occupied by the assessee is owned by him ; or

(b) the assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him ;]

If you notice, both the conditions mentioned above have been satisfied.

We go further to see the explanation to the prescribed method to further understand the quantum of rent covered under 10(13a) - Rule 2A:

Explanation to Rule 2A, states that "relevant period" means the period during which the said accommodation was occupied by the assessee during the previous year.

Thus based on the above, the rent paid during the whole of 12 months should be available for claim. Please note that the deduction is not based on monthly basis (the monthly basis of computation is done only for the ease of TDS computation)

Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2013 @Nikhil:-

But There are Two Condiotins to Claim HRA

Must Getting HRA from Employer
Must Paying rent

Where the First One Condition is Fulfilled in case of April and May Two Months

Nikhil Kaushik

Nikhil Kaushik (Expert)
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18 February 2013 As I said, the condition is on annual basis. There is nothing in the act to suggest that the condition has to be met on month to month basis.

The relevant period is the period for which rent is paid instead of the period of employment.