I work in Bangalore. Can I claim HRA for a house that I rent in Calcutta?
Rahul Sinha (Team Lead) (44 Points)
07 September 2012I work in Bangalore. Can I claim HRA for a house that I rent in Calcutta?
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 07 September 2012
to claim HRA you have to establish that the rented property is used for living of yourself or your parents,
Rahul Sinha
(Team Lead)
(44 Points)
Replied 07 September 2012
| Originally posted by : U S Sharma | ||
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to claim HRA you have to establish that the rented property is used for living of yourself or your parents, |
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Here is what I intend to claim:
1. I stay in Bangalore in a rented house for which my wife pay the rent and claim that as her HRA.
2. My parents stay in Calcutta in a rented house for which I pay rent and claim HRA. When I visit Calcutta I stay in that house.
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 07 September 2012
House rent allowance (HRA) is received by the salaried class. A deduction is permissible under Section 10(13A) of the Income Tax Act, in accordance with Rule 2A of the Income Tax Rules. You can claim exemption on your HRA under the Income Tax Act if you stay in a rented house and get a HRA from your employer.
The HRA deduction is based on salary, HRA received, the actual rent paid and place of residence. The place of residence is important. For Mumbai, Kolkata, Delhi or Chennai, the tax exemption on HRA is 50 percent of the basicsalary, while for other cities it is 40 percent of the basic salary.
The city of residence is to be considered for calculating HRA deduction.
The least value of these is allowed as tax exemption on HRA:
Actual rent allowance the employer provides as part of salary in the relevant period during which the rental accommodation was occupied Actual rent paid for the house, less 10 per cent of basic pay 50 percent of basicsalary if you reside in Mumbai, Calcutta, Delhi or Chennai, or 40 per cent if you reside in other cities.
In order to claim the exemption, the rent must actually be paid for the rented premises which you occupy.
Also, the rented premises must not be owned by you. As long as the rented house is not owned by you, the exemption of HRA will be available up to the limits specified.
For the purpose of this deduction, salary means basic salary and includes dearness allowance, if the terms of employment provide it, and commission based on a fixed percentage of turnover achieved by the employee.
The deduction is available only for the period during which the rented house is occupied by the employee and not for any period after that. It is to be noted that the tax benefits for home loans and HRA are two separate aspects.
saurabh jain
(Audit Specialist)
(271 Points)
Replied 08 September 2012
Also, the rented premises must not be owned by you. As long as the rented house is not owned by you, the exemption of HRA will be available up to the limits specified.
Rahul,
these lines clarifies that you can claim HRA in this situation.
Rahul Sinha
(Team Lead)
(44 Points)
Replied 08 September 2012
My understanding of language in tax literature is poor. So, I had registered with this website to have a better understanding through conversation with experts like you. Most of the times I have been successful in my attempt, which has helped me save taxes in righteous way. I hope that this time too I would get a lucid reply.
So let me give a better picture of what I want to claim:
1. I stay in Bangalore in a rented house for which my wife pays the rent. She claims that rent as her HRA since she is also a working individual.
2. My mother is owner of a house in Calcutta. I want to claim that I pay rent to my mother for that house and that I stay there when I visit Calcutta. My mother will show that rent-income in her tax-filing.
3. My mother stays in a different house in a different town in suburb of Calcutta. This house too is owned by her and is about 30kms away.
All that is stated above is a verifiable fact. I want to know whether my claim stated above will pass through HRA rules thus help me save of taxes. Additionally provide source of income for my mom and help me support her in senile age without "gift" money.
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