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Is house rent allowance taxable in India?

Is house rent allowance taxable in India?

Although it is a part of your salary, HRA, unlike basic salary, is not fully taxable. Subject to certain conditions, a part of HRA is exempted under Section 10 (13A) of the Income-tax Act, 1961. The amount of HRA exemption is deductible from the total income before arriving at a gross taxable income.

What is the rule of house rent allowance?

As per the income tax rules, the tax-exempt part of the HRA (House Rent Allowance) is the minimum of the following amounts: Actual HRA component of salary. 50% of basic salary if he resides in Delhi, Chennai, Kolkata, or Mumbai; 40% if his residence is in any other city. Actual rent paid less 10% of basic salary.

What are the rules for HRA exemption?

You can claim HRA exemptions by submitting your monthly rent receipts….The exemption on your HRA benefit is the minimum of:

  • The actual HRA received,
  • rent paid annually reduced by 10% of salary,
  • 50% of your basic salary (if you live in a metro city), and.
  • 40% of your basic salary (if you live in a non-metro city).

Which is the tax exemption for house rent in India?

The House Rent Allowances that is given by the employer. 50% of the employee salary is eligible for HRA tax exemption if he or she lives in any of the Metro cities of India. The metropolitan cities of India include Delhi, Mumbai, Calcutta and Chennai In case the employee lives in any other city then 40% of the salary can be HRA exempted.

How is house rent allowance calculated in India?

As we explained earlier, house rent allowance calculation is calculated on the basis of the HRA calculation formula, and the tax-exempt portion of the HRA is the minimum of the following elements: 50% of the ‘salary’ if the accommodation is in the metro cities (Delhi, Mumbai, Chennai, Kolkata) and 40% for other cities

Do you have to pay tax on house rent allowance?

For most employees, House Rent Allowance (HRA) is a part of their salary structure. Although it is a part of your salary, HRA, unlike basic salary, is not fully taxable. Subject to certain conditions, a part of HRA is exempted under Section 10 (13A) of the Income-tax Act, 1961.

How is the House Rent Allowance ( HRA ) determined?

It can also be calculated manually. How is HRA Decided? HRA is mainly determined by your salary. As per the income tax rules, the tax-exempt part of the HRA (House Rent Allowance) is the minimum of the following amounts: 50% of basic salary if he resides in Delhi, Chennai, Kolkata, or Mumbai; 40% if his residence is in any other city