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Rent allowance eligible..

NAGA (ACCOUNTANT) (518 Points)

02 October 2020

sir,
how much rent allowance eligible in income tax

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15 Replies

Santosh Hegde (133 Points)
Replied 02 October 2020

Refer sec 10(13A) of income tax act.

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 04 October 2020

If you are receiving HRA (House rent allowance) from your Employer than you can claim HRA Deduction u/s 10(13A) for rent Paid.

If you are not receiving HRA or you are a self employed person than you can claim Deduction under section 80GG for rent Paid.

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Nidhi (Chief Accountant) (3150 Points)
Replied 04 October 2020

How much HRA allow

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 04 October 2020

The deduction available is the least of the following amounts:

a. Actual HRA received;

b. 50% of [basic salary + DA] for those living in metro cities (40% for non-metros); or

c. Actual rent paid less 10% of basic salary + DA

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Nidhi (Chief Accountant) (3150 Points)
Replied 04 October 2020

And 80GG deduction up to which limits

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 04 October 2020

The least of the will be considered as the deduction under this section:

a. Rs 5,000 per month;

b. 25% of adjusted total income;

c. Actual Rent less 10% of adjusted total Income

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Nidhi (Chief Accountant) (3150 Points)
Replied 04 October 2020

Adjusted total income means which income, out income as per tax

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 04 October 2020

Adjusted Total Income means Total Income Less long-term capital gain, short-term capital gain under section 111A and Income under section 115A or 115D and deductions 80C to 80U (except deduction under section 80GG).

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