HRA for living in different city

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Vivek (Querist)
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06 February 2023 Hi Team,
My Employer allows 3 days WFH in a week and not necessarily mandated that for every week. I have taken rent in Chennai, where me and my family stays on rent. 1 week in a month, I visit Gurgaon, my place of work and there I stay in a PG/ with relatives/ Oyo room. My HR have disallowed the HRA claim even though I have given the rental agreement, rent receipts. Please let me know what needs to be done. Is there any rule in income tax that rental accommodation needs to be taken only at the place of work? As far I read section 2A of section 10(13A) I do not get the impression. Please also note that all my documents (Aadhar, Passport, etc) have the address of Chennai and not Gurgaon. Also I'm having gas connection, Mobile connection, Jio Fiber Broadband connection all from this address

Question 2: I'm thinking of renting a flat in Gurgaon as well. I will be living in Gurgaon for 2 weeks and Chennai for 2 weeks. Can I claim HRA for both the rents paid? I will take a broadband connection as well in Gurgaon and will be paying the electricity bill in Gurgaon to show that I stayed in both places. This is in addition to the rental agreement and rent receipts paid for both these locations.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 Let's address your queries regarding HRA (House Rent Allowance) claims under the Income Tax rules:

### Question 1: HRA Claim for Rent Paid in Chennai

1. **Place of Work and Rental Accommodation**:
- Income Tax rules do not mandate that rental accommodation must be taken at the place of work. Section 10(13A) of the Income Tax Act allows for exemption of HRA received by an employee, provided they are paying rent for accommodation occupied in the course of employment.
- Since you are paying rent in Chennai where you and your family reside, and you occasionally travel to Gurgaon for work-related purposes and stay in alternate accommodations (PG, Oyo rooms, with relatives), you are eligible to claim HRA for the rent paid in Chennai.

2. **Documentation**:
- To claim HRA, you typically need to provide:
- Rental agreement
- Rent receipts
- Evidence of actual payment of rent (such as bank transactions)
- Address proof showing your residence in Chennai (Aadhar, Passport, utility bills, etc.)

3. **HR Disallowance**:
- If your HR has disallowed your HRA claim despite providing the necessary documents, you should:
- Review the company's HRA policy to understand their reasons for disallowance.
- Discuss with your HR or payroll department to clarify the issue and provide any additional documentation they require.
- If the issue persists, you may need to escalate it to higher authorities in HR or seek clarification from a tax consultant regarding your eligibility under the Income Tax Act.

### Question 2: Renting a Flat in Gurgaon

1. **Claiming HRA for Both Rents**:
- If you decide to rent a flat in Gurgaon and split your time between Chennai and Gurgaon (2 weeks each), you may potentially claim HRA for both rents paid, subject to certain conditions:
- You must genuinely occupy and pay rent for both accommodations.
- Ensure you maintain proper documentation for both accommodations, including rental agreements, rent receipts, and evidence of rent payments (bank transactions).
- Utility bills (like electricity bills) and other local connections (broadband, gas connection) in Gurgaon can support your claim of residence in Gurgaon during your stay periods.

2. **Electricity Bill and Broadband Connection**:
- Having utility bills (electricity, broadband) in your name at the Gurgaon address, along with rental agreements and rent receipts, strengthens your case for claiming HRA for the Gurgaon accommodation during your stay periods.

3. **Tax Implications**:
- It's important to consult with a tax advisor or accountant to ensure compliance with Income Tax rules and to maximize your HRA benefits based on your specific circumstances and the nature of your travel and stay arrangements.

In summary, you can claim HRA for rent paid in Chennai based on your permanent residence there, despite occasional stays in Gurgaon for work-related purposes. If you decide to rent a flat in Gurgaon as well, you can potentially claim HRA for both accommodations, provided you meet the criteria and maintain proper documentation supporting your stay at each location.