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Meaning of Rent for HRA purpose

Sujit Talukder (service) (719 Points)

14 January 2009

Foe HRA exemption calculation, what type of payment is treated as RENT?

For eg., a person pays Rs 1000 pmas REnt for 1st floor + Rs 3000 pm for Maintenance charges + Rs 5 per kwh for Electricity consumption.(which comes to around 2000 pm)

Whehter all the payments will be considered as rent paid for HRA exemption purpose?

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13 Replies

BALASUBRAMANYA B N (CCI STUDENT....) (44668 Points)
Replied 14 January 2009

HRA exemption only what u pay for the rent, rest will not come to HRA.......

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somya (ca ) (172 Points)
Replied 14 January 2009

only rs.1000 will be allowed for exemption

Sujit Talukder (service) (719 Points)
Replied 14 January 2009

Thanks for the reply.

But maintenance charges etc also paid towards House taken on rent?

What's the logic or legal point which limits the rent amount to 1,000 ( ie basic rent only)?

Would the position differ if 6000 consolidated rent is paid?

Shudhanshu Agrawal (Business) (2570 Points)
Replied 14 January 2009

Rent amount means the amount which is mentioned in the rent deed. For HRA exemption the amount paid by the employee to the landlord willbe treated as rent....for more clarification go through Section 10(13A)

Shudhanshu Agrawal (Business) (2570 Points)
Replied 14 January 2009

Dear Somya

There is no such limit of Rs. 1000 in case of rent exemption

Rent paid by employee can be upto any amount...please correct urself

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Sujit Talukder (service) (719 Points)
Replied 14 January 2009

Originally posted by :Shudhanshu
"	Rent amount means the amount which is mentioned in the rent deed. For HRA exemption the amount paid by the employee to the landlord willbe treated as rent....for more clarification go through Section 10(13A)	"

Dear Shudhanshu It seems that you are a student and lacks practical knowledge. When I have posted the question, it is obviously based on Rent deed. and what if there is no rent deed? Also note that Somya reply is related my query and based on the example mentioned in the query. Rs 1000 is not the limit, but indicates the basic rent amount. So dont make hurry while replying a post. read it, understand it and then give reply which is related to query. Also Sec 10(13A) doesnot define the word Rent.

Shudhanshu Agrawal (Business) (2570 Points)
Replied 14 January 2009

Thanks Mr. Sujit for correcting me....and im sorry that i have answered the question after reading 50% only....and sorry to somya as well

If about practice......i have done lot practice......but that mistake was due to carelessness

The answer for ur query is that in Section 10(13A) with rent in bracket it is mentioned that by whatever name called.....so all this willbe included in rent

Sujit Talukder (service) (719 Points)
Replied 14 January 2009

Its all right

My intention was just to point out the fact that unneccessary replies makt the post junk and makes it unusable to others who might be searching for similar kind of query.

Pavan Jain S (Chartered Accountant) (1575 Points)
Replied 15 January 2009

In my opinion, rent includes all payments made to the owner of the HP for enjoyment of the property i.e., it must be attributable to letting out of the property. So, all payments made by the tenant can be included in the purview of rent.

To avoid disputes, it is preferable to draft rent agreement in such a manner that it subtantiates ur claim

Vijay gandhi (consultant) (567 Points)
Replied 17 January 2009

HRA exemption only what u pay for the rent, rest will not come to HRA.......

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Ritesh Sharma (CA) (58 Points)
Replied 17 January 2009

The Rent that will be considered will not include and electricity charges. It looks like the rent is split purposefully to avoid taxability under section 22 by claiming composite rent and then claim the actual expenditure. Hence, I would like to believe that the rent that would be allowed is only Rs.1000 only which the owner would offer to tax under Income from House Property. Do appraise me of any points that I may be missing

yogesh dave (service) (376 Points)
Replied 17 January 2009

whatever, amount paid to landlord will be treated as Rent whether it includes, muncipal tax, electricity charges, etc. or not include, does not matter. And the landlord has to show whatever amount he receives from the tenant as Rent Income only and he can show the electricity charges, muncipal tax as expenses against the rent income.

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 19 February 2009

Mr. Sujit

As far as concerned about Rent means

" Amount paid by way of expenditure actually incurred by assessee in respect of residential accomodation occupied by him " As per Rule 2A

So interpretation of above is Rent menas everything paid for residing including electricity . Becoz electric meter is on the name of landlord & you are paying somewhat like maintainence & for residing in house .