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Hra taxability

Anubhaw Garg (Chartered Accountant in Practice) (101 Points)

28 March 2016

If an employee has basic salary of Rs. 50000 and it includes HRA received from the company and it can't be separated from basic salary. Employee is paying Rs. 5000 as house rent. So what is the treatment for this?

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Vikas Gupta (Tax Executive) (530 Points)
Replied 29 March 2016

This not practically possible. No one can avail the benefit of HRA exemption untill HRA does not form part of his salary u/s 10(13A) of IT Act. One can avail HRA benefit only if HRA is separately shown in his salary structure. However, if HRA doesn't form part of his salary, he can avail exemption u/s 80GG.