Income Tax
This query is : Resolved
10 October 2009
An employee has 2 employers, one is providing house at concessional rent & the other is providing House Rent Allowance. What will be the taxability of the HRA provided by the 2nd employer? Can employee claim exemption under both the cases?
11 October 2009
Hi Princy,
HRA from 2nd employer will be fully taxable.
House provided at concessional rent will be taxable as perquisite as per Rule 3(1).
Then rent paid will be deducted from the valation of house based on Salary.
Moreover Salary will include salary received from the 2nd employer also.
Only deduction available is rent paid will be deducted from Perquiste valuation.
No exemption.
HRA from 2nd employer will be fully taxable.
House provided at concessional rent will be taxable as perquisite as per Rule 3(1).
Then rent paid will be deducted from the valation of house based on Salary.
Moreover Salary will include salary received from the 2nd employer also.
Only deduction available is rent paid will be deducted from Perquiste valuation.
No exemption.
12 October 2009
But when exemption of HRA is calculated, then on third point there is a conditin of rent paid - 10% of salary, then we can take this rent because we had actually paid rent.
13 October 2009
Yes but the rent is to be deducted for calculation of Value of Accomodation at concessional rent .
So u can't get the benefit of rent twice.
Hope i am clear now.
So u can't get the benefit of rent twice.
Hope i am clear now.
22 October 2009
I am not yet convinced....
There are 3 conditions when exemption is not granted u/s 10(13A) and they are :-
1. When the assessee stays in his own house.
2. When he does not pay any rent or incur any expenditure towards rent.
3. When rent paid is less than 10% of salary.
These 3 conditions are not satisfied in my query...
So plz reply after onsidering this....
There are 3 conditions when exemption is not granted u/s 10(13A) and they are :-
1. When the assessee stays in his own house.
2. When he does not pay any rent or incur any expenditure towards rent.
3. When rent paid is less than 10% of salary.
These 3 conditions are not satisfied in my query...
So plz reply after onsidering this....
09 November 2009
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.
i think now u r satisfied with answer
i think now u r satisfied with answer
10 November 2009
Thanx for th reply but i m still confused whether he can claim exemption under both or not?
31 July 2024
When an employee has two employers and receives benefits related to housing from both, the taxability of House Rent Allowance (HRA) provided by the second employer and the ability to claim exemptions can be a bit complex. Here’s a detailed breakdown of the situation:
### 1. **Concessional Rent from First Employer**
If the first employer provides housing at concessional rent, this benefit is treated as a perquisite and is taxed under the head "Salaries" as per Section 17(2) of the Income Tax Act. The value of this perquisite is determined based on the difference between the actual rent paid and the market rent, and it is added to the taxable salary.
### 2. **House Rent Allowance (HRA) from Second Employer**
The HRA received from the second employer is taxable under the head "Salaries" but can be partially exempted based on certain conditions. To claim exemption on HRA, the employee must fulfill the following conditions:
- **HRA Exemption Calculation**: The HRA exemption is calculated based on the minimum of the following three amounts:
1. Actual HRA received.
2. Rent paid minus 10% of basic salary.
3. 50% of basic salary (for metro cities) or 40% (for non-metro cities).
- **HRA Exemption Eligibility**: To claim HRA exemption, the employee must be paying rent for accommodation in which they are not living in a house provided by the employer.
### 3. **Claiming Exemption Under Both Cases**
- **Perquisite for Concessional Rent**: The concessional rent provided by the first employer is considered a perquisite and is taxable as such. It is not a part of HRA exemption but is rather a separate component of taxable salary.
- **HRA Exemption**: You can claim HRA exemption from the second employer, provided you meet the criteria for HRA exemption and are paying rent. However, if you are receiving concessional rent from the first employer, the house provided at concessional rent should ideally be accounted for while calculating the HRA exemption.
### 4. **Taxability Considerations**
- **HRA Exemption Impact**: The concessional rent benefit from the first employer might impact the amount of HRA exemption you can claim. The HRA exemption is generally intended for employees who pay rent and do not have an employer-provided house. If you have a house provided at concessional rent, the HRA exemption from the second employer might be restricted or not applicable.
- **Documentation and Verification**: Ensure you maintain proper documentation regarding both the concessional rent provided by the first employer and the rent paid for which HRA is claimed. If there are any discrepancies or incorrect claims, it may be questioned during tax assessments.
### Conclusion
**In summary**:
- You can claim HRA exemption from the second employer, but the concessional rent benefit from the first employer will affect the amount you can claim.
- The concessional rent provided by the first employer will be treated as a perquisite and will be taxable under "Salaries."
- Ensure you are compliant with the conditions for claiming HRA exemption and keep accurate records to support your claims.
For detailed and specific advice based on your circumstances, consulting a tax professional or financial advisor would be beneficial.
### 1. **Concessional Rent from First Employer**
If the first employer provides housing at concessional rent, this benefit is treated as a perquisite and is taxed under the head "Salaries" as per Section 17(2) of the Income Tax Act. The value of this perquisite is determined based on the difference between the actual rent paid and the market rent, and it is added to the taxable salary.
### 2. **House Rent Allowance (HRA) from Second Employer**
The HRA received from the second employer is taxable under the head "Salaries" but can be partially exempted based on certain conditions. To claim exemption on HRA, the employee must fulfill the following conditions:
- **HRA Exemption Calculation**: The HRA exemption is calculated based on the minimum of the following three amounts:
1. Actual HRA received.
2. Rent paid minus 10% of basic salary.
3. 50% of basic salary (for metro cities) or 40% (for non-metro cities).
- **HRA Exemption Eligibility**: To claim HRA exemption, the employee must be paying rent for accommodation in which they are not living in a house provided by the employer.
### 3. **Claiming Exemption Under Both Cases**
- **Perquisite for Concessional Rent**: The concessional rent provided by the first employer is considered a perquisite and is taxable as such. It is not a part of HRA exemption but is rather a separate component of taxable salary.
- **HRA Exemption**: You can claim HRA exemption from the second employer, provided you meet the criteria for HRA exemption and are paying rent. However, if you are receiving concessional rent from the first employer, the house provided at concessional rent should ideally be accounted for while calculating the HRA exemption.
### 4. **Taxability Considerations**
- **HRA Exemption Impact**: The concessional rent benefit from the first employer might impact the amount of HRA exemption you can claim. The HRA exemption is generally intended for employees who pay rent and do not have an employer-provided house. If you have a house provided at concessional rent, the HRA exemption from the second employer might be restricted or not applicable.
- **Documentation and Verification**: Ensure you maintain proper documentation regarding both the concessional rent provided by the first employer and the rent paid for which HRA is claimed. If there are any discrepancies or incorrect claims, it may be questioned during tax assessments.
### Conclusion
**In summary**:
- You can claim HRA exemption from the second employer, but the concessional rent benefit from the first employer will affect the amount you can claim.
- The concessional rent provided by the first employer will be treated as a perquisite and will be taxable under "Salaries."
- Ensure you are compliant with the conditions for claiming HRA exemption and keep accurate records to support your claims.
For detailed and specific advice based on your circumstances, consulting a tax professional or financial advisor would be beneficial.
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