House Rent Allowance (HRA) Tax deduction FAQ

by Abhinav Gulechha on November 14, 2013

House Rent Allowance is exempt subject to conditions under Section 10(13A) of the Income Tax Act.

If you are employed, in all likelihood, you must be getting House Rent Allowance (HRA) as part of your salary. You have to deal with House Rent allowance at 3 points during the year:

  • As part of filling investment declaration in April-May, you have to specify the rent paid per month. Your employer will use this info to calculate your monthly TDS deduction from salary.
  • When the employer calls for proof of investment, generally you are required to provide rent agreement copy + rent receipts (each company has a different policy, some are strict, some are lax…)
  • At the time of filing income tax return, your form 16 will contain an exemption relating to house rent allowance. If you have forgotten to claim, you can claim now

Claiming House Rent Allowance deduction involves some calculations, and then there is paperwork involved, hence a lot of queries and confusions. Hence, I have tried to compile some FAQs to help you claim the right deductions.  I will be really happy to answer any queries of readers in this regard

Who can claim House Rent Allowance?

Only if you are in employment and getting a “salary”, you can claim deduction of house rent allowance. In case you are a self-employed professional, no sweat!  -though you cannot claim house rent allowance exemption, you can claim exemption under section 80GG (I wil do a detailed post on that section in coming days).

How to calculate exemption in respect of House Rent Allowance?

When you are calculating HRA for tax exemption, consider the following points:

  • Your Salary
  • HRA received in your salary
  • House Rent paid by you: You can get tax exemption only when the house rent paid by you is more than 10 per cent of your salary.

•     Place of residence: If you are living in a metro city (Mumbai, Kolkata, Delhi or Chennai) then tax exemption on HRA is 50% of the basic salary, while that for non-metro cities is 40% of the basic salary.

Simple steps are given below to calculate your taxable amount in HRA:

A: Find out how much HRA you have received in your salary

B: Calculate 50 % of your basic salary (if living in metro) else 40 % of your Basic Salary

C: Calculate excess rent paid over 10% of your salary (Actual rent paid – 10% of your salary), that will be the amount that is fully exempted from tax.

D: Taxable amount:  (HRA Received – Excess Rent paid over 10% of salary) = A – C

Sample example to calculate tax exemption on HRA

Mr Amit earns a basic salary of Rs 50,000 per month and lives in a rented apartment in Mumbai. He pays Rs 25,000 per month as house rent. The actual HRA he receives is Rs 30,000. How much will be his taxable amount in HRA received by him?

  • Actual HRA received                                                   30,000
  • 50 per cent of the basic salary,(metro City)                25,000
  • Excess of rent paid over 10% of salary:     25,000(Actual rent) – Rs 5,000(10% of 50,000)        20,000,

So on the above amount of Rs 20,000, he will get tax exemption

  • Taxable Amount: (HRA received-Exemption on HRA) = Rs. 30,000 – 20,000= Rs. 10,000

Important note:

If the above mentioned factors remain constant throughout the year, then exemption can be calculated on an annual basis, however, if even a single parameter changes, then house rent allowance exemption has to be done monthly and summed up for year.

For this purpose, download this calculator here that will help you calculate the correct exemption for the year:

DOWNLOAD HRA EXEMPTION CALCULATOR

Can I get tax exemption for the entire year even if I had lived in a rented accommodation only for 2 months in that year?

Tax exemption for house rent allowance is allowed only for that part of the year in which you have lived in a rented accommodation and rent is paid by you.

If you have lived for rent for only 2 months, you can use the calculator and enter rent paid details for only 2 months, for rest of the months, you will have to enter zero. The calculator will automatically calculate and grant you exemption for 2 months and return the exemption amount.

While calculating tax exemption on HRA, only salary of the period during which rental accommodation was occupied will be considered. Also, salary is determined on due basis( considering basic salary, dearness allowance and commission). This means that if you receive due salary of earlier years or advance salary for future years, it will not be considered while calculating the tax exemption.

In what cases I am not eligible for tax exemption in respect to HRA?

You will NOT be eligible for tax exemption on HRA if,

  • If you live in your own house,
  • If you live in a house where you don’t pay any rent i.e., living in a relative’s place etc
  • If the rent paid by you is less than 10% of your basic salary.
  • If you pay house rent to your spouse, this does not qualify for exemption as she is not the owner of the house.

But you can claim exemption on rent paid to others including parents, brother, sister in-laws etc provided that they own the house and registry is in their name.

Can I claim for tax exemption if my rent payment is due and not paid?

Also, you need to pay the rent before claiming for tax exemption. If rent is due but not paid, you would not be eligible to get tax exemption. A proof of rent payment (receipts from the landlord) needs to be provided to the employer while calculating the HRA tax exemption in the monthly tax calculation.

Can I consider my wife’s salary also for claiming tax exemption?

If both husband and wife are working and living in the same rented house, both can claim HRA subject to the share of rent paid by them individually. Both can claim exemption up to their share of rent paid by them.

Do I always need to provide PAN details of my landlord while claiming for tax exemption?

You need to provide PAN details of landlord if rent exceeds Rs. 1.0 lac in a year.

Also note that Income Tax Department tightened its focus on bogus HRA Exemption claimed by salaried employees in income tax returns. Refer to this article on economic times here 

What if my landlord does not hold PAN Card? Will i get tax exemption in that case?

According to the CBDT circular, if your landlord does not have a PAN, he has to provide a declaration with his signature and his complete name and address, that he does not have a PAN card. Along with it, he has to identify himself by attaching valid identification proofs.

I am having a property which is under construction, can i avail HRA tax exemption on this property?

No, as under construction property does not qualify for tax exemption.

I am having Home Loan, can i still claim for tax exemption on HRA?

Well Home Loan and HRA does not have an impact on each other.

If  your own home is rented out or you work from another city etc then As long as you are paying rent for an accommodation, you can claim tax benefits on the HRA component of your salary, while also availing tax benefits on your home loan. Please account for any rental income you receive from the property you own under income from House Property.

What are the Proofs to be submitted while claiming for tax exemption on HRA?

Following documents as proofs are required to be submitted in order to avail HRA exemption benefits.

Rent receipt from Landlord, Rent Agreement from Landlord and Landlord’s PAN details

When do i need to provide rent receipts for availing the HRA exemption?

You need to provide proof of rent paid by you in the form of rent receipts. If the amount of rent paid is less than Rs 3000 the submission of rent receipts is not mandatory, otherwise submission of rent receipts is necessary for availing the HRA exemption.

Do I  need any other supporting document when paying rent by cash?

Also, if the rent is paid by cash and the amount is more than Rs 5000, then on the rent receipt a revenue stamp of Rs 1 is required to be pasted on the rent receipt and signed across by the landlord.

Details of HRA in Form 16

Having submitted the necessary proofs for claiming tax exemption and fulfilling other necessary conditions to get tax exemption, you can find your HRA details in Form 16 provided by your employer.

Below screen shows the HRA tax exemption in Form 16.

House Rent Allowance (HRA) Tax deduction FAQ

Same details you are required to fill in your Income Tax Return Form,

ITR1 Form

There is only one column in ITR1”Income From Salary” for filling up your chargeable Income earned as Salary or Pension. Here in this column you are required to fill your Gross Salary which includes all deductions, allowances etc. Below is the screenshot of ITR1, here in the column marked in red, you have to fill your Gross Salary details.

House Rent Allowance (HRA) Tax deduction FAQ

ITR2 Form

Below is the screenshot of Schedule S in ITR2 Form.

  • Salary (Excluding all exempt/non-exempt allowances, perquisites & profit in lieu of salary ) should be filled from Gross Salary column shown in Form 16 screenshot above.
  • Fill the other matching columns like Profits in Lieu of Salary, Value of prerequisites from the above Form16.

House Rent Allowance (HRA) Tax deduction FAQ

If you have forgotten to claim for HRA tax exemption last year, you can still claim it now.  This time the taxable income would be more, because employer would have deducted tax on it. Now when you claim it in ITR you are likely to pay less tax this time and your tax liability will reduce. There are some cases where you have paid more tax than due you might get refund also.

Hope this article was useful to you. For any queries or suggested please write to us.

 

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Abhinav Gulechha

SEBI RIA and Principal Financial Planner at M/s Soham Financial Planners
Abhinav is a SEBI Registered Investment Advisor (RIA) and the Principal Financial Planner at www.sohamfp.com, where he provides fee-only financial planning advice and mentoring to help families plan and organise their financial life and move confidently in direction of their life’s most important goals. By qualification, he is a Certified Financial Planner (CFPCM) and a Chartered Accountant (ACA), and has a 9+ years of industry experience. He regularly writes on his website as well as in reputed journals /industry magazines, and also serves as visiting faculty at a couple of FPSB India’s authorised education providers in Mumbai. He is also a member of The Financial Planners’ Guild, India (FPGI), an association of Practicing Certified Financial Planners.

{ 282 comments… read them below or add one }

Allan January 27, 2014 at 11:11 pm

Hi,
Do I have to submit a rental agreement if I’m paying rent to my mother or will the rent receipt do to get HRA exemption? The issue is that I want to claim HRA exemption for the whole financial year but haven’t any agreement with my mother.

Reply

Abhinav Gulechha January 28, 2014 at 12:48 pm

Dear Allan

There is no requirement under Income Tax Act for an agreement. However, your employer may/ may not ask for an agreement copy in addition to receipts, to give you an exemption. If they do, you will have to provide.

Reply

Allan February 3, 2014 at 8:44 pm

Thank you!

Reply

Abhinav Gulechha February 4, 2014 at 11:27 am

You’re most welcome Allan!

Reply

Krishna Reddy January 30, 2014 at 11:48 am

Hi, I am staying with my father and didn’t have any rental agreement document and so didn’t claimed HRA with my employer. Also, I showed that I am staying in self owned flat for which i am actually receiving a rent of 4000 per month. Now I noticed that I am ending up paying more towards the tax and want to claim it while filing IT returns. Can you please suggest what should I do?

Reply

Abhinav Gulechha January 30, 2014 at 12:41 pm

Dear Mr. Krishna

I am not clear to your query. You cannot stay in own flat and pay rent at the same time, except where you are staying elsewhere on rent due to business/ profession exigencies.
And if you are living in own flat, how come you are getting rental income?

Please clarify.

Reply

Bindu January 30, 2014 at 4:51 pm

I just read an article stating “Those people who are living in a rented accommodation but paying pre-EMI for the soon-to-be possession of their new home, how can they calculate the exemption?
Those who have booked house and have taken home loans from various financial institution must be paying monthly EMI (Equated Monthly Instalments) to their respective financial institutions. They’ll get the deduction as per the normal category which is:
a) HRA Received
b) Rent paid Less 10% of Salary
c) 40% of salary (50% for Metro Cities)”

My question is if i am residing in a rented house and paying EMI for soon-to-be possession of my new home. can i avail tax benefit on HRA if i don’t submit rent receipt

Reply

Abhinav Gulechha January 31, 2014 at 10:45 am

Dear Ms. Bindu

Irrespective of whether you are paying pre-EMI for your other booked flat or not, you will get HRA deduction for the rent paid and as per your employer’s policy, you WILL have to provide rent receipts and/or copy of agreement to claim the deduction.

note one very important thing – in the year and month in which the construction of your flat is completed, you can start claiming one fifth of pre-EMI interest from that year, however DO NOT claim HRA post the month in which construction is completed. Many people make this mistake.

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Rajesh February 2, 2014 at 1:19 pm

Can I furnish rent agreement even if it does not include my name?

Reply

Abhinav Gulechha February 3, 2014 at 5:40 am

Dear Mr. Rajesh

Normally employers ask for rent agreement has to be in your name but it is not a compulsory requirement under the Income Tax Act. You can check with your employer company’s policy in this regard whether they accept it. If they do, then no problem.

Reply

Pranay Kumar February 5, 2014 at 1:58 am

Dear Mr Gulechha

I have a query

If I have to keep my family for a period of 9 months in a different city that my city of employment , since I cannot shift them due to board exams etc to my city of employment . Can I get the HRA INCOME TAX EXEMPTION on the rent being paid for my family . ? If yes what do I need to do

Reply

Abhinav Gulechha February 5, 2014 at 10:22 am

Dear Mr. Pranay

Yes, you can do that. There is no issue. Only that you need to provide proper rent receipts to employer. In this case, even if you have own house for which you want to claim interest deduction for loan, you can do that too..

Reply

joy smith February 5, 2014 at 9:50 pm

Hi Mr Abhinav,

Can I claim HRA exemption when filing my IT returns. Actually I paid around 90000 rent this year but when my employer asked for submitting rent agreement and receipt, I was not in india. So my employer is not giving any tax exemption on HRA as the deadline for submitting proof is over. Can I some how claim for a refund while filing returns in 2014. If so, what all docs are required as proof and is the process to get refund complicated. What steps should I take to ensure proper tax refund

Reply

Abhinav Gulechha February 5, 2014 at 10:13 pm

Dear Mr. Joy

Yes you can definitely claim HRA exemption while filing your tax return. You do not need any extra docs. While filing tax return, just calculate the HRA exemption and deduct from “Income from Salaries” as shown in your Form 16, and show that amount in the return. You will get the refund for the HRA amount.

Reply

joy smith February 6, 2014 at 10:32 am

Do I not need to submit rent agreement and rent receipt while filing returns?

Reply

Abhinav Gulechha February 6, 2014 at 12:03 pm

No, you dont need to. Just retain those documents at your end so that later in case of any enquiry, they can be produced.

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Rakesh Pushp February 6, 2014 at 10:55 am

Can I claim HRA exemption? I have paid around Rs. 30000 rent this year. But my employer is not willing to give any rent receipt to me. my annual salary is Rs. 280000, and i am not getting any HRA.
is it possible to get rebate without rent reciept and without pan card of landlord.

Reply

Abhinav Gulechha February 6, 2014 at 12:04 pm

Dear Mr. Rakesh

If your employer does not give you “House Rent Allowance” as a salary component, you cannot claim HRA exemption.

Reply

Rohit Jha February 6, 2014 at 2:01 pm

Hi abhinav,
in the section “Sample example to calculate tax exemption on HRA” above, the basic salary of Rs.50,000 is the gross or the net salary or is it the basic component of the salary?
Thanks
Rohit

Reply

Abhinav Gulechha February 6, 2014 at 3:48 pm

Dear Rohit

It is the “basic component” of salary. For HRA calculation purpose, only basic salary is considered.

Reply

Rohit Jha February 6, 2014 at 4:37 pm

Thanks a lot for the quick and helpful reply.

Reply

Abhinav Gulechha February 7, 2014 at 11:50 am

You’re most welcome Rohit, glad to have helped you. Also check out our other posts, you should find them helpful and let me know in case you have any queries.

Reply

DrHaresh Mulani February 7, 2014 at 7:20 pm

I have reported all deductions to my employer. But he ask me to claim HRA
exemption by myself as he dont know how to calculate it. Now how can I
claim them in my Income Tax Return. What documents i need to submit and
to whom?

Reply

Abhinav Gulechha February 8, 2014 at 11:37 am

Dear Mr. Haresh

You do not need to submit any documents. Just go through our post again and you can calculate exemption yourself. When filing the return, deduct the HRA exemption amount from Income from salaries as per form 16 and file the return. Any questions let me know.

Reply

DrHaresh Mulani February 8, 2014 at 4:43 pm

Thank for your reply. While filing the return, i can deduct the HRA exemption amount from Income from salaries as per form 16 and file the return. But employer refusing to furnish the details of HRA exemption in Form 16 given by them. Now i want to know how to claim that in my Income Tax Return without that details given in Form 16. Weather i have to submit any document?

Reply

Abhinav Gulechha February 10, 2014 at 11:53 am

You can calculate it yourself and claim in your income tax return. No document needs to be submitted.

Reply

Shah February 8, 2014 at 9:08 am

I am staying with my in-laws, paying rent to them and also have own flat which is rented in near by locality. I don’t get HRA, would like to check if I can claim 80GG ?

Reply

Abhinav Gulechha February 8, 2014 at 12:14 pm

Dear Shah

Sorry, since you have own residential accomodation in nearby locality, you will not be able to claim deduction u/s 80GG as well.

Reply

A.ANBAZHAGAN February 9, 2014 at 10:41 pm

Dear sir,
If i pay rent at two places i.e one place where i am working and another one place where my parents are living ( rent is 1250 + 4500 ). shall i eligible for HRA exempt for my whole rent paid rs 5750 ? .

Reply

Abhinav Gulechha February 10, 2014 at 12:01 pm

Dear Sir

You can claim only for the house where you are staying and paying rent, not for your parents house, even if you are paying that rent as well.

Reply

Sachin Arora February 19, 2014 at 7:42 pm

Dear Abhinav,

In a similar case (A. Anbazhagan) of mine. I work in Mumbai during weekdays (Mon-Fri) & stay in a rented (Rs 84000 pa) house alone. But my wife & daughter live in Ahmedabad again in a rented (Rs 72000 pa) flat for which I pay rent. During every weekend (Sat-Sun), I go there and live with them.

In that case can I claim both the rents paid by me for HRA exemption?

Reply

anbazhagan February 10, 2014 at 9:57 pm

thank you very much sir

Reply

Abhinav Gulechha February 11, 2014 at 8:25 am

You’re most welcome and its my pleasure!

Reply

Mahesh February 10, 2014 at 10:44 am

HI,
I am staying in Hostel. There is no chane to submit rental agreement and receipts and pancard of landlord. In this situation can i submit the HRA as tax excemption?
My HRA is 8k per month. Can i submit total HRA meank 96K as tax excemption? As per your calculator it will be 72k.
Please suggest on it.

Reply

Abhinav Gulechha February 10, 2014 at 12:04 pm

Dear Mr. Mahesh

The wording in Income Tax Act is “residential house” so frankly I do not think you can claim HRA for your hostel stay expenses.

Reply

Rachit Aggarwal February 11, 2014 at 5:24 pm

Hi, My HRA claim was rejected in company due to some resaon. Can i claim it while filing my returns.

Reply

Abhinav Gulechha February 11, 2014 at 6:54 pm

Dear Rachit

Can you tell me what was the reason? If it was a genuine reason, you cannot claim in your tax return.

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Rachit Aggarwal February 11, 2014 at 8:39 pm

Actually, my claim amount is more than 1 lakh and I failed to provide them the PAN no. of my house owner to company officials on time. However, Now, i have arranged pan card no. of my house owner so can i claim now,.

Reply

Abhinav Gulechha February 12, 2014 at 8:29 pm

Dear Rachit

You can claim in return, but you also need to provide PAN details to your employer so please do that..

Reply

Shah February 17, 2014 at 10:50 pm

Can I claim HRA while filing return? In case if my salary don’t have break up of HRA, can I still claim HRA deduction ?

Reply

Abhinav Gulechha February 18, 2014 at 9:50 am

Hi, I think you asked the same query earlier as well – let me clarify again, if you do not receive house rent allowance as a salary component, you cannot qualify for HRA exemption.

Reply

Bhavya Venugopal February 18, 2014 at 12:07 pm

Hi Mr Gulecha!

Thank you for taking the time to write this. Sure is helpful! I’m glad i found this article, but I got slightly confused reading it.

Here is my problem: My salary is 20,000/- (basic pay 7,200/- & HRA 2,880/-). The actual rent i pay is 7000, (which is 4,120/- more than my HRA.) So what will be my deductible amount?

My HR Manager says that only 2,880/- is deductible. But according to this article, i don’t think she is right. Also, when you say 10% of the salary, is that total salary or basic salary?

In the example you cited above, the person get more HRA but pays less rent, so i got a little confused. please help me! :(

Reply

Abhinav Gulechha February 18, 2014 at 2:45 pm

Dear Bhavya

Thanks, I see that you are also a blogger, and checked your blog, and its very nice!

Coming to your query, your HR manager is right. Deduction will be Rs. 2880 p.m. and hence all of your HRA will be exempt. Also please note that exemption cannot exceed the amount you get as allowance. On your question of 10% of salary, its “basic salary” and not “total salary”.

Trust this helps. In case of any further clarification, please let me know.

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Bhavya Venugopal February 18, 2014 at 4:23 pm

Hi Mr. Gulecha!

Thank you for visiting my blog & for your kind words! :)

What I’m still unclear about is this: the actual rent I pay is 7,000/- a month (which is almost equal to my basic pay!), so why is only 2,880/- considered for deduction? The “basic” salary is fixed by the company, I have no role in it. The rule says that 10% of this “basic salary” can only be considered to calculate HRA. Then they should consider only the “basic salary” to calculate the income tax as well, i must say! I guess it is difficult to know why the system works the way it does! Looks very unfair to me :(

Thank you for taking the time to explain this to me though :)

Reply

Abhinav Gulechha February 18, 2014 at 4:59 pm

Yes Bhavya, what you said is logically right, but actually the way tax rules are made, is beyond comprehension…and HRA is nothing, if you see other rules like valuation of perquisites like car and all, they can be actually baffling.

But we have to just go by what the rules say. Good point you raised about “basic salary” – now, here, some progressive companies I know allow employees to CHOOSE proportion of basic salary as well – so in case someone selects a higher basic, he/she can get higher deduction, but well, the mandatory 12% EPF deduction will also be on the higher side.

So, its like this only and we have to work within these rules and extract the best out of it:) but yes, you’re most welcome and please let me know if you face any issues/ challenges on personal finance front, will be glad to help!

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Bhavya Venugopal February 18, 2014 at 5:58 pm

No wonder people are looking for ways to evade tax. Nobody wants their hard earned money to disappear unfairly without any logic or sense whatsoever… I sure don’t!

Will surely check with you for any finance related issues. Thanks again for your insight Mr. Gulecha! :)

Reply

Abhinav Gulechha February 18, 2014 at 8:08 pm

You’re most welcome..thanks for reading!

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Amit Khandelwal February 19, 2014 at 8:43 am

Hi Abhinav,
I live at my brother’s place and I pay rent to him. The HRA guidelines of my employer asks for an agreement registered with the local registrar to avail the HRA exemption, if the property is owned by a relative. However there is no such mandate under the income tax act. I am suppose to stay for less than a year at my brother’s place and the cost of registering the agreement would get close to the entire amount of exemption I can claim throughout the year. What are my options?

Reply

Abhinav Gulechha February 19, 2014 at 10:03 am

Dear Amit

Asking for an agreement copy is your company’s policy and you cannot do much about it. However, you can claim HRA exemption at the time of filing your return. But before doing that, ensure following points:

1) Pay to your brother through cheque/ online bank transfer – so that the entry is reflected in your bank statement
2) Ensure that your brother declares this income in his income tax return
3) Retain some sort of receipts for rent payment each month with you – you need not submit it elsewhere.

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DrHaresh Mulani February 20, 2014 at 2:21 pm

My first four month salary is different and remaining month salary is different. Details are:
For first four Month:
Basic Pay: 16250 + Grade pay 6000= 22250
DA : 35 % of basic Pay = 7787
HRA 10% of basic pay = 2225

Remaining months

Basic Pay: 16920 + Grade pay 6000 =22920
DA : 35 % of basic Pay = 8022
HRA 10% of basic pay = 2292

I have done the calculation of HRA exemption as explained above and i found the value 27,236

Weather it is correct?
if wrong help me to correct calculation.

Reply

Sachin Arora February 20, 2014 at 3:15 pm

Dear Abhinav,
In a similar case (A. Anbazhagan) of mine. I work in Mumbai during weekdays (Mon-Fri) & stay in a rented (Rs 84000 pa) house alone. But my wife & daughter live in Ahmedabad again in a rented (Rs 72000 pa) flat for which I pay rent. During every weekend (Sat-Sun), I go there and live with them.
In that case can I claim both the rents paid by me for HRA exemption?
- See more at: http://sohamfp.com/house-rent-allowance/#sthash.qMyTcuOA.dpuf

Reply

Abhinav Gulechha February 21, 2014 at 2:27 pm

Dear Mr. Sachin

As per HRA norms, you can claim exemption w.r.t. house where you are residing so that way you can include rent for both houses for your calculation purpose, however, exemption will be available for the lowest value of all the 3 values. Trust this clarifies.

Reply

Sachin Arora February 24, 2014 at 11:20 am

Thank you very much Abhinav,

The 3 values that you are referring should be which ones, please help.

Regards
Sachin

Reply

Abhinav Gulechha February 24, 2014 at 12:59 pm

Dear Sachin

Thanks. Please read the post once again – I have mentioned those in the post – lowest of those will be the exempt portion of HRA and rest will be taxable.

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Skr450 February 21, 2014 at 10:18 am

Hi Abhinav,

I have a rental house ( registered under me & my wife) in Hyderabad. In house there are 3 tenants (salaried) staying. I am worried if I 3 of them use my PAN details to get benefit , if they use how it will affect me while filing the return. Can I give my wife PAN details for my tenants.

Thanks In Advance…

Reply

Abhinav Gulechha February 21, 2014 at 2:30 pm

Dear Sir

I assume you are showing the rent received from all three in your income tax return. In such a case, even if all 3 give your PAN to their respective employers, it will not be an issue. Ensure that you maintain proper documentation e.g. counterfoil of receipt that you issue for the rent receipt.

No, please dont give wife’s PAN details.

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Skr450 February 22, 2014 at 8:35 pm

Thanks Abhinav.. In my apartment a couple and his brother is staying, I am receiving rent only from head of the house among them, and if in this case all 3 of them cannot show rent paying to me. Only head of house to whom I am giving rent receipt can use my PAN. Am I correct. Thanks again :-)

Reply

Abhinav Gulechha February 23, 2014 at 5:10 pm

Yes you are right

Reply

Abdul February 24, 2014 at 11:46 pm

Dear Sir,

My salary is Rs.2,40,000/- per annum.
I am in non Metro city and living in a rented house.
I dont know about my HRA, since I have not seen pay slip.
My house rent is Rs-8000/ per month (Rs.96,000/- per Year)
In my company, they saying that they will deduct the tax. So if they deduct how much they will deduct and can you please provide me how to proceed with this.
Also Please provide me the steps for bringing the House rent into account.
If I bring house rent, then what will be the tax amount I have to pay.

Thank you in advance

Reply

Abhinav Gulechha February 25, 2014 at 10:55 am

Dear Abdul

You can claim HRA deduction if you receive HRA as your salary component, so please first check your salary breakup. If you do receive HRA, you can submit receipts etc. to employer and they should give HRA exemption to you. How much exemption you will get, check it through the downloable calculator I have provided in the post. In case of any issue, let me know.

Reply

Amit Khandelwal February 26, 2014 at 8:34 am

Hi Abhinav,
Thanks a lot.

Reply

Abhinav Gulechha February 26, 2014 at 11:15 am

You’re most welcome Amit…keep reading and be in touch!

Reply

Ashish Pandey February 26, 2014 at 12:16 pm

Hi Abhinav,
I am a salaried employee. I received HRA from my company. I also made clain against HRA and it is reflected in my Form 16 for the year. Now my returns is opened for scrutieny and IT Officer is asking for proof of rent. This is for FY2010-2011. I had submitted all supporting document to my employer and currently I do not have any document with me. Please advice how I should reply to IT Officer.

Reply

Abhinav Gulechha February 26, 2014 at 1:49 pm

Dear Ashish

Did you submit originals of rent receipts to your employer? Did you not retain a copy for your records? Did you pay by cheque? In that case, your bank statement for that period would be reflecting the entries – check all these things. Also check if there is a rent agreement, if registered then all the more better.

If you have been paying in cash and submitted origianl rent receipts to employer, explain it to Assessing Officer honestly- he might ask you to get a signed letter from the landlord whom you paid rent, along with his PAN. you will have to do accordingly.

Reply

Ashish Pandey February 26, 2014 at 7:03 pm

Thanks for your help Abhinav.

a) Yes I have submitted originals of rent receipts to employer. and unfortunately I did not keep copy of records.

b) I paid House rent in two portions
i) Portion one –> 16500, mostly reflected in my bank account statement.
ii) Portion two –> 8000, I paid by cash on behalf of owner towards society maintenance.

That time owner gave me complete receipt of 24500 which i submitted to employer.
Due to fear of Income Tax, now owner is not cooperating and I am finding it difficult to produce proof of complete 24500.

Could you please suggest
a) what options I have?
b) In worst case how much tax and/or penalty i might have to bear.

I am extremely thankful for your help and advise.

Reply

Abhinav Gulechha February 27, 2014 at 10:58 am

Dear Ashish

As far as entries reflected in your bank statement, this will be a strong evidence of the payment. For payments not reflecting by way of entries, you can formally request in writing to your landlord that you need just the rent receipt for the amounts paid in cash to him, and retain evidence of sending this communication to him. After that, if no reply is received, you can put this across to Assessing Officer that despite your best efforts, you are not able to get a receipt from landlord, and original was submitted to the employer. Simultaneously, also put a formal application to your employer to retrieve the original receipt, as you need to produce to income tax due to scrutiny assessment.

After doing all this, it depends on the assessing officer what view he/she takes of the case. In the worst case, you will have to pay tax equal to 100% to 300% (depending upon the AO’s decision) on the amount of HRA claimed by you.

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suresh singh February 26, 2014 at 11:56 pm

Hi Abhinav Gulechha

assessment office which is employed by company to look into salaries and tax filing rejected my HRA proof. I missed to get a sign from house owner on one of the papers provided, so they rejected it. We have policy to claim it as PAN NOT AVAILABLE of owner even if rent is above 15k.

They had actually sent a mail following my investment proof submission, but since i did not check mail in time and did not respond with 3 days, my tax was calculated minus HRA.

is there a way i can still claim HRA ?
BR
Singh

Reply

Abhinav Gulechha February 27, 2014 at 11:02 am

Dear Suresh Singh

Yes please have a word with concerned person in that department. Tell them the issue that you will provide the rectified set of proofs in a couple of days, and ask them to adjust the HRA exemption while computing the March salary. If they do, thats great, but there is a chance that they can reject also.

Even then no problem. Just retain the correct proofs in your file, and when you submit income tax return, you can deduct the HRA exemption amount from the “Income from Salaries” as given in your Form 16 and then go ahead and file the return. To the extent you save tax on HRA, your overall tax liability will reduce or you will get refund.

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suresh February 27, 2014 at 7:39 pm

Thank you Abhinav, I requested them and they agreed to consider re submission. I appreciate your reply.

Suresh

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Abhinav Gulechha February 28, 2014 at 10:02 am

Thats great Mr. Suresh, glad to know. You’re most welcome!

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Kalpana February 27, 2014 at 8:28 pm

Hi Abhinav,

Can you pls help me. My HRA got rejected by my company. and now when I wanted to resubmit my docs again, they have freezed the process of proof submission. In this case, the Form 16 provided by company will not have my HRA deductions. So how can I mention HRA while filing IT return. What is the process for it.

Thanks in advance for ur reply.

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Abhinav Gulechha February 28, 2014 at 10:05 am

Dear Ms. Kalpana

There is nothing to worry. First try to understand why the company rejected your claim, are you actually entitled to the claim at the first place? If yes, you can deduct the exemption amount from “Income from Salaries” shown in your Form 16 at the time of filing the return and claim the exemption at that time..

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Amit Chauhan March 1, 2014 at 12:04 pm

Hi Abhinav,
Can I pay rent of Rs 9000 to my father staying in the same house on different floors along with my wife, and if my father shows the same income in his ITR, I hope it is the right way of doing it.
Secondly, do i need to submit the original rent receipts to my employer.
Thirdly, Is it compulsory to have a rent agreement with my father and is it compulsory to submit the rent agreement along with the rent receipts to the employer, or just the rent receipts will do.
Regards,
Amit

Reply

Abhinav Gulechha March 1, 2014 at 4:14 pm

Dear Amit

Pointwise replies as follows:
1) Yes, you can pay rent to father even if same flat different floors – your father has to show this income in his ITR.
2) Yes, whatever is your company’s policy, you have to comply with it (if they require original rent receipts, you have to provide them) – make sure you retain a xerox and keep in your file
3) No, for claiming exemption there is no compulsion in Income Tax Act to have an agreement etc. – in your case, it will even be impractical. In case your employer is OK with rent receipts, that will be great, but if they make agreement as a pre-condition to grant of exemption, then you can claim it at the time of filing the return

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hari hari March 3, 2014 at 11:42 am

Hi Abhinav,

I have not submitted my house rent slips or anything as HRA tax exemption as a result 25k has been deducted from salary of Feb 2014. Is there to get my back which is gone (i.e can i claim now for HRA tax excemption)

Thanks

Reply

hari hari March 3, 2014 at 11:45 am

Hi Abhinav,

Sorry for the typo.

I have not submitted my house rent slips or anything as HRA tax exemption as a result 25k has been deducted from salary of Feb 2014. Is there any chances to get my money back which is dedcuated (i.e can i claim now for HRA tax excemption)

Thanks
Hari.

Reply

Abhinav Gulechha March 3, 2014 at 1:16 pm

Dear Hari

Yes, no need to worry. First check with your employer if they can consider your submission now, and adjust in March salary. If not, you can do the following:
a) Retain the receipts at your end
b) Calcualate the HRA exemption as per the calculator given by me in the post
c) Deduct the HRA exemption from income from salaries as shown in Form 16 and show the resultant amount in your return – this way your tax liability will get reduced/ you will get refund.

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hari March 3, 2014 at 1:55 pm

Thanks a lot Abhinav

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Abhinav Gulechha March 3, 2014 at 2:24 pm

You’re most welcome. Do subscribe to our newsletter for regular updates:)

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sonika March 3, 2014 at 7:50 pm

I have claimed

I have claimed Rs 150,000 HRA from My Co. but the Actual HRA claim that I can get is Rs 200,000 as per caculation. I have only given receipts for 11 months, Can I claim the differential amount(Rs 50000 as last month rent amount along with proof) in Return and get the refund on excess on tax deducted as my Co.’s window is closed for any adjustments.

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Abhinav Gulechha March 4, 2014 at 10:49 am

Dear Sonika

Yes, you can do so at the time of filing the return. Just ensure that you have calculated the HRA exemption amount correctly. HRA exemption does not simply mean the rent paid. Use the calculator I have given in the post and whatever diffrential amount of exemption that your company has not given you, you can claim at the time of filing income tax return.

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amit March 4, 2014 at 10:44 am

Dear Sir,

My file is opened for scrutiny for assessment year 2010-11, i showed a monthly rent of 30,000/- ,actually i was paying only 22000/- , now how can i submit the proof as in bank statements carry transactions only for 22000/- . What are my options.

Best Regards

Reply

Abhinav Gulechha March 4, 2014 at 10:54 am

Dear Amit

No option. I guess IT department will levy a penalty on the tax you have tried to evade by claiming wrong exemption (the penalty ranges from 100% to 300% of the tax amount evaded, on the discretion of the Assessing Officer)

Reply

Santosh March 4, 2014 at 4:36 pm

Dear Sir

I purchased a property at Vadodara in current financial year with SBI home loan.I got possession from november 2014 and I am staying here.
Till that I was staying in rented house(from march-2013 to Oct.2013).So can I claim for HRA for that seven months with Interest & principal amount claim.?

Reply

Abhinav Gulechha March 4, 2014 at 5:28 pm

Dear Santosh

Yes, you should claim HRA only for the 7 months you stayed on rent i.e. April to Oct (NOT for the full year) and from November onwards you can claim interest and principal payment for home loan as Loss from House property & under Section 80C respectively.

Also want to complement you for the foresight – not many people bother about it and they claim HRA for full year which is a dangerous mistake. If the case opens up for scrutiny, the IT department levies a penalty on excess HRA claimed.

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Santosh March 4, 2014 at 6:17 pm

Thanks for your guidance.

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Abhinav Gulechha March 4, 2014 at 6:44 pm

You’re most welcome. Dont forget to subscribe to our newsletter for regular updates:)

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Rajesh March 4, 2014 at 9:31 pm

Hi Abhinav,

Thank you for the article. I have a query related to HRA exemption.

I was staying in rented house from May 2013 to Dec 2013. From Jan 2014 onwards I am staying in my new house. So total rent paid to the landlord is less than 1 Lakh (12,400 rupees * 8 months = 99200rs) in FY13-14. So I have submitted my rent bills without landlord PAN Number because the rent amount is less than 1 lakh rupees.

My employer (Big IT Giant) is come up with new formula of 8333 per month and if it is exceed 8333 per month rent then they are asking PAN number from landlord otherwise they are not considering the rent proof.

In my case, I only stayed for 8 months in rented house and monthly rent (12400rs) was paid exceeded 8333 rupees but it is less than 1 Lakh in the FY13-14.

Is there any rule called 8333 per month exists in IT Tax Dept.?

How I can avail my HRA exemption amount during IT returns filing?

Thank you so much for your time.

Thanks,
Rajesh.

Reply

Abhinav Gulechha March 5, 2014 at 12:06 pm

Dear Rajesh

Thanks for your query. I have checked the exact wording in Income Tax Circular 8/2013 dated 10/10/2013 – it says “annual rent” exceeding > Rs.1 lac – now it can be interpreted both ways, but if you ask my view, the view adopted by your employer is correct and I agree with it i.e. 8333/month.

You can simply calculate the deduction amount yourself and when you receive form 16 from employer, in the tax return you can deduct HRA exemption from that amount – automatically, your tax payable amount will be adjusted.

Note that since you were not living for full 12 months on rent, you will need to calculate the exemption month wise (take help from the calculator I have posted) – let me know in case of any issues.

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Rajesh March 14, 2014 at 4:41 pm

Thank you Abhinav.

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Abhinav Gulechha March 14, 2014 at 5:50 pm

You’re most welcome:)

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Varun Gupta March 6, 2014 at 3:57 pm

Dear Abhinav
Presently i am staying in my parents house at Mumbai & giving rent of Rs. 12000/- to my parents, however 35 kms away i have my own house which is also co-owned by my parents, we have rented this flat & Rs. 8000/ – rent amount is being credited to my parents account. further last year in Aug’13 i was transferred to Gujarat however due to job my wife is still saying in mumbai & hence we are giving HRA to my parents.
Due to my transfer even i have to get a rented apartment in Gujarat at Rs 5000/. so below are my queries.

1. Can i claim HRA for both Mumbai & Gujarat apartments
2. Since i am the Co-owner of the house & rent is being received by my parents, do i need to show it under Income from property.

Reply

Abhinav Gulechha March 6, 2014 at 5:06 pm

Dear Varun

Even if you own a house, you are allowed under Income Tax Act to claim HRA exemption for rent paid by you ONLY IF you are staying at the place of rent due to your job/ business exigencies. In your case, Gujarat house you can definitely claim, but Mumbai please be sure why you are paying rent despite having own house in Mumbai – if you can prove that it is because its closer to your place of work, rent paid for Mumbai also will qualify.

Make sure that HRA exemption calculations are different for Mumbai and Gujarat, so please calculate accordingly.

As regards your second query, ideally you and your parents should show income in the in your respective returns as per the ownership share. So. if your ratio of ownership is 50%, you should show 50% of rent received as income as house property.

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Ramesh March 13, 2014 at 1:57 pm

Dear Abhinav,

Can you please help me calculate the exemption with Basic = 32775, HRA = 11640 and I am paying 19000/pm as rent?

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Abhinav Gulechha March 13, 2014 at 2:41 pm

Dear Mr. Ramesh

I have explained it in detail in the post along with a calculator, please check.

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Krupa Oza March 14, 2014 at 3:37 pm

Hi, i need to file return filing for 12-13 and have got form 16A from 3 company’s where i worked. please help me out with the details to be filled in…bcos m getting confused in filling details for HRA..

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Abhinav Gulechha March 14, 2014 at 5:53 pm

Dear Krupa

You dont need to do anything for HRA – assuming you are doing e-filing, just sum up the “income from salaries” as per the form 16 received from all the 3 companies and show it as “income from salaries” in your return.

Any queries let me know.

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Azim March 14, 2014 at 7:30 pm

Hi,

Hi,

My employer has rejected my HRA due to incorrect PAN i had entered in the system. Now since the cut off date has ended and i am sure i will pounded with heavy tax now. To claim my tax Can i include the HRA while filing the returns?

if Yes then what documents are needed while i file ITR and any extra form to fill?

Reply

Abhinav Gulechha March 15, 2014 at 5:51 pm

Dear Mr. Azim

First tell your employer to update correct PAN in records, if they are crediting TDS in wrong PAN, you wont get credit of TDS in your income tax return, due to which you can get a demand notice from IT department, which can be a far bigger issue. Also check your Form 26AS, whether the tax credit is reflected properly or not – read my recent post on this topic

As regards HRA,dont worry, you can deduct the exemption amount from the income from salaries as given in Form 16 and show that amount in return – no need to submit the proofs anywhere just retain the receipts in your income tax file.

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Azim March 17, 2014 at 7:39 am

Thanks Abhinav

Thanks Abhinav

The part of PAN i meant i had entered my Landlord’s PAN incorrect in the system hence my HRA was rejected saying it is Invalid. Now that you have confirmed i don’t need to submit any proof while submitting ITR, i am hoping i will get my refund by submitting the HRA in ITR.

Thanks again.

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Abhinav Gulechha March 17, 2014 at 9:53 am

You’re welcome!

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Priyam March 21, 2014 at 2:08 pm

If an employee is working in Bangalore(staying in rent) and his family is based out of Chennai(staying in rent), can he claim HRA for the rent he is paying in Chennai or only for Bangalore or can he claim for both?

Reply

Abhinav Gulechha March 21, 2014 at 4:12 pm

Dear Mr. Priyam

The Income Tax Act is silent on this. It just mentions “rent” – so, in my view, one can take liberty to include rent of both places, provided rent for both places is actually paid out by you.

Only small confusion will be how to calcualate the exemption – because if its a metro (chennai), first parameter is 50% of basic whereas if it is chennai, it is 40% of basic….

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Priyam March 22, 2014 at 12:20 pm

Thank you Mr. Abhinav

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Priyam March 22, 2014 at 3:14 pm

I have one more query. For deduction under U/s. 80U for disabled persons, can a disabled employee submit certificate to the Employer and get exemption or it has to be done by him separately at the time of filing returns?

Reply

Abhinav Gulechha March 22, 2014 at 7:25 pm

Dear Priyam

Both can be done. Either the certificate can be submitted to employer or if this is not done/ employer does not take it into account, the deduction can be taken at the time of filing the IT return, in that case certificate need not be submitted anywhere.

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Abhinav Gulechha March 22, 2014 at 7:23 pm

You’re most welcome Priyam!

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shobha March 22, 2014 at 10:40 pm

This is regarding my frds problem..she gets salary income of 9,00,000 with HRA of 1,70,000, stays in rented house , claims HA excemption of 99,000, &1,00,000 u/s 80 c,..she also get rental income of 7,20,000 , pays 15,000 property tax.so what is the income tax caluculation for her? can she claim HRA as she own house in same city but rented out for above amount?

Reply

Abhinav Gulechha March 23, 2014 at 12:10 pm

Dear Shobha

As regards income tax computation, kindly get in touch with a CA or google for an income tax calculator, that will help. As regards your second point, YES both HRA can be claimed and rental income can be shown – also, if loan was taken for the house, principal and interest deduction can also be claimed along with HRA.

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priyanka March 26, 2014 at 3:53 pm

I had one query and would be grateful if it could be answered.

I am eligible for HRA exemption of about Rs 2lacs and want to claim an exemption of Rs 1lac.

However since I was travelling i was not able to submit my rent receipts on time to my company and hence they have not computed it.

Is there any way I can include this while filing returns ? Since I have not submitted the receipts will it be included in my form 16 ? can I still take benefit out of this ?

Please respond and help.

Thank you so much.

Reply

Abhinav Gulechha March 27, 2014 at 10:42 am

Dear Ms. Priyanka

Dont worry. YES You can claim it at the time of filing the returns. You can simply deduct HRA exemption amount from “Income from Salaries” as shown in form 16, and show the balance amount in the tax return.

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r.sampath March 27, 2014 at 12:46 pm

Dear Sir,
I am employed at pvt. concern. due to financial crisis in my company, i have received only 8 months salary
for fy 2013-2014.

my question is, how can i claim the house rent exemption for 12 months (because i am paying house rent every month for whole year). as per the directives of my company sources, they will consider the
hra what they paid (i.e 8 months hra) only taken for calculating hra exemption. this will reduce the hra exemption, because the rent paid is more than hra paid.

they will plan to pay the 4 months unpaid salaries in next financial year.

i request you to give reply and hope that this will help many employees in my organisation.

R.Sampath

Reply

Abhinav Gulechha March 31, 2014 at 12:49 pm

Dear Mr. Sampath

Sorry for delay in reply. As per the provisions of Section 15 of Income Tax Act, salary is to be taxed on due or receipt basis whichever is earlier. So, ideally, even if you are not receiving 4 months salary, it should be included in your return for this year, and taxed in this year, as it has become due this year. In this situation, full 12 month HRA and rent paid will be taken for calculation.

However, if your company is taking the interpretation that it is taxable on receipt basis, only 8 months salary can be taxed in this year, and rest 4 months salary will be taxed in the year when it is received. So, for this year, you will be able to claim exemption only on the 8 months HRA and not full 12 month HRA. Rest 4 month HRA you can claim when you get arrear salary for 4 months and in that financial year, you can also claim relief u/s 89.

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r.sampath March 31, 2014 at 5:48 pm

Dear Sir,

Thanks for your reply. I am sure, it will be useful for all employees of our concern to claim relief when they will get the arrear salary.

Regards
R.Sampath

Reply

Abhinav Gulechha March 31, 2014 at 6:37 pm

Thanks Mr. Sampath, you’re most welcome. I will also be shortly writing a post on how to calculate relief u/s 89..

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Swapnadip Halder April 1, 2014 at 1:40 am

My tax was deducted without hra exemption as i did not submit the rent receipts. I have hra as part of my salary. Can i take the refund from my employer before form 16 is generated or do i have to wait for tax return filing.

Reply

Abhinav Gulechha April 1, 2014 at 12:01 pm

Dear Swapnadip

No, you cannot ask for a refund from employer as tax is already deducted. What you can do is to deduct HRA exemption amount from salary income as shown in Form 16 and show only net figure in your tax return. As a result, your tax liability will be automatically adjusted and refund due will be paid to you.

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Kumar April 5, 2014 at 12:29 am

i live in my own house and work in mumbai, but i also travel frequently to delhi and stay at my parent’s place. Can i claim HRA by actually paying rent for the place in delhi to my parents?

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Abhinav Gulechha April 5, 2014 at 1:30 pm

Dear Kumar

Do you ACTUALLY pay rent to your parents for visits to stay with them? If not, the question does not arise. Even if you do, since visits are not for work purpose, exemption cannot be claimed. Trust this clarifies.

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Unnati Shah April 13, 2014 at 10:27 am

Hi Abhinav,

I pay rent to my mother through HRA. She is 59 years old. Is the rent she receives fully taxable? Or there is some exemption to her?

Thanks.

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Abhinav Gulechha April 14, 2014 at 1:52 pm

Dear Unnati

It will be included in your mother;s income. However, it will be taxable only if your mother’s total income for the year from all sources exceed Rs. 2 lacs.

Reply

unnati shah April 14, 2014 at 4:39 pm

Say if the income exceeds 2 lacs is there some standard exemption? As I read on some other example that there is 30% exemption to HRA received by father and the remaining amount is then taxable. Just need to clear my doubt on this.
Thanks in advance.

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Abhinav Gulechha April 15, 2014 at 1:07 pm

Dear Unnati…

If total income exceeds Rs. 2 lac, then it amount till 5 lacs is taxable @ 10, further Rs. 5 lacs is taxable at 20% and after that, taxable at 30% – this is the tax slab.

About 30% exemption you are talking about, it must be the 30% standard deduction from net annual value to arrive at the “Income from House Property” – that means, from whatever rental income your father/ mother shows in their return, it will be Net annual value from such property and from that a fixed deduction of 30% is available – balance is income from house property that he/she has to show in the return.

Trust that clarfies.

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GAURAV GUREJA April 15, 2014 at 9:33 am

MY WIFE IS EMPLOYED IN A PRIVATE COMPANY.HER WAGE SLIP STATES NO. OF DAYS WORKED AND GROSS PAYABLE WAGES.CAN SHE CLAIM HRA UNDER 80GG AND IF SO WHAT DOCUMENTS SHE IS REQUIRED TO HAVE IN ORIGINAL FOR IT RETURN.SHE HAS MONTHLY INCOME OF 20000.WE ARE PAYING RENT OF 10000.WE HAVE JOINT RENT AGREEMENT WHICH IS NOT REGISTERED AND WE ARE PAYING RENT IN CASH AND DONOT HAVE RENT RECEIPTS

Reply

Abhinav Gulechha April 15, 2014 at 1:30 pm

Dear Gaurav

First check whether your wife gets HRA as part of salary – if yes she has to claim HRA deduction. If there is no HRA, she can claim 80GG deduction provided she pays the rent from her income and has a declaration in Form 12BA signed and kept with oneself for later on producing to AO. Ideally if she is planning to claim deduction, rent receipt must be maintained as proof of payment of rent but no document needs to be provided to IT department at the time of filing the IT return. Joint unregistered rent agreement and paying rent in cash is OK.

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Pratap Konda April 17, 2014 at 1:30 pm

Hi Abhinav,

a) Can a husband and wife claim for HRA from the same house rented? b) Considering both of them working for different private companies? c) if the answer is yes, can the claim be 50% or 100% of HRA applicable to them as per their HRAs?

Lastly, I would like to ‘Thank you’ for the commendable work you are putting through by going through each and every question and responding to them in detail and in person. Its really Laudable ‘Hats off’!.. for the effort and work you are putting through.

Reply

Abhinav Gulechha April 17, 2014 at 3:10 pm

Dear Pratap

Pointwise reply to your questions as follows:

a) Yes, provided both are contributing for it
b) Thats OK, no problem if working for separate companies
c) Both spouses can claim 100% HRA each as per their company policy subject to the exemption limits laid down under Income Tax Act and explained by me in the post…

trust this clarifies. helping people on proper financial planning is my passion and your appreciation takes my commitment to a higher level. Share your queries at contact@sohamfp.com and dont forget to subscribe to my newsletter.

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Pratap April 17, 2014 at 3:21 pm

Abhinav,

Thank you very much..

Pratap

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Abhinav Gulechha April 18, 2014 at 12:40 pm

Most welcome Pratap!

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sanjay bhaskaran April 19, 2014 at 4:08 pm

if i am staying in lodge cum guest house , whether rent receipt received from them can be used for getting HRA Deduction in income tax

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Abhinav Gulechha April 19, 2014 at 8:56 pm

Dear Sanjay

Dont think so – the place where you are staying should be your residence – lodge/guest house is a place where one stays for a limited period of time and cannot be construed as a residence. However, its my personal opinion and subject to interpretation.

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Amit Khandelwal April 22, 2014 at 7:57 am

Hi Abhinav,
As per the new HRA rules the PAN of the House owner needs to be provided if the annual rent exceeds Rs 1 lakh(Monthly limit Rs 8333 p.m).However if the rent agreement is made from June 2014 then the limit for monthly rent should become Rs 10000 p.m for not providing the PAN Just want to seek your opinion if the limit mentioned in the new HRA rules is yearly and not monthly(unlike the previous HRA rules which said Rs 15000 p.m)

Thanks,
Amit Khandelwal

Reply

Abhinav Gulechha April 22, 2014 at 2:03 pm

Dear Amit

Yes you are right, there is some scope of interpretation here. The income tax circular 08/2013 says “annual rent > Rs. 1 lac” – now, its upon the employer to interpret it as they feel is right. However, requirement for providing PAN is to the employer – if you want to claim HRA deduction directly in your return, then there is no issue of PAN.

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ram April 23, 2014 at 3:07 pm

Hi Abhinav,
in a financial year i have worked in 2 different organizations and in first company i have worked for 5 months and not provided any proof for HRA exemption since company collect it in the month of january. New company had given HRA tax exemption only for remaining 7 months. The first 5 month HRA exemption not covered in any of the company. In this case
1. How can i get HRA exemption for first 5 months and what proof should be submitted while filing return?
2. If i claim only Rs 3000/- per month how can i mention it in return filing document?

thanks in advance

Regards
Ram

Reply

Abhinav Gulechha April 24, 2014 at 2:06 pm

Dear Ram

You have to simply calculate HRA exemption for the first company where you worked (you will have to calculate it on a monthly basis) – that exemption amount, you can deduct from the combined “Income from Salaries” of both employers, and show the net amount in the return. No need of submitting any documents, just retain the house rent receipts with yourself.

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ramprasad April 25, 2014 at 1:04 am

Dear Abhinav,
Thanks for your kind response. I have one more query
I am paying rent of Rs 12000/- per month and my landlord not ready to share his PAN number. He is also not ready to give declaration saying he does not have PAN number. Here i am loosing lots of tax.
I have decided to do one thing. I ll make rent agreement on my wife name for Rs 8K and i ll get bill from my wife ( Kind of subletting) for 12K with her PAN number. She is housewife and she does not have any other source of income. If I make agreement with my wife, her annual income will be 144K which is non taxable income for her.
Will this idea workout? Will there be any problem in doing so?

Regards
Ramprasad

Reply

Abhinav Gulechha April 25, 2014 at 3:49 pm

Dear Ramprasad

novel idea but I dont think it will work. You can have 2 options 1) either convince employer (provide it with self-attested printout of e-mail etc. sent to landlord) that he is not sharing PAN b) if that does not work, claim HRA at the time of filing your IT return.

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John Fernandes April 25, 2014 at 10:33 pm

Sir, is it possible for a govt employee to claim tax exemption under HRA rules if he she is staying in his or her in-laws house and paying rent to them even if they were initially staying with their parents where the house is in the name in of parents. does he she have to inform their respective department that they are no longer staying with their parents and now staying in their in-laws house and paying rent to them. does it effect the home town address as the house is owned by parents and now that one is staying in inlaws house. wht is the procedure for this type of situation to claim tax rebate on HRA.
Regards John.

Reply

Abhinav Gulechha April 26, 2014 at 1:52 pm

Dear John

No there is no such requirement. Just ensure that you actually are paying rent, you have valid receipts for rent paid.

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Sathya May 8, 2014 at 10:38 am

Hi Sir,

I need a clarification, Me and my husband working in a same company , can we both claim for HRA since i have a kid am staying with my mother (rental house) and my husband is staying nearby office which is also a rental house. My question is can we both claim for HRA since we work in same company but different rental houses?

Reply

Abhinav Gulechha May 8, 2014 at 3:18 pm

Dear Sathya

Different rental houses is not an issue. You can separately calculate the HRA exemption in your individual cases and claim exemption in your individual returns. However, do ensure that you are actually paying rent, because as you said you are living with your mother, so your rent you pay to your mother will be her income. If your mother has no other income and income after including rental income is 0, then not an issue, otherwise your mother will have to pay tax on the incremental rental income.

Trust this clarifies.

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Sathya May 8, 2014 at 4:03 pm

Thank you so much Sir for your clarification. My mum is not having any other income and the house is also a rental one and she is a dependent,that means it is an income for the house owner. Still my mum has to pay tax sir?

Reply

Abhinav Gulechha May 8, 2014 at 7:57 pm

Dear Sathya

In case your mom is not an owner but as a capacity of tenant, then any income you pay will be taxable to her as “Income from Other sources”. But as you said she does not have any income, so if the annual rent amount is less than Rs. 2 lacs for the year, nothing taxable to your mom. Hope that clarifies.

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Sathya May 13, 2014 at 8:52 am

Thank you so much Sir for your clarification!

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Abhinav Gulechha May 13, 2014 at 1:25 pm

Thanks, it was entirely my pleasure!

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Sathish Kumar.N May 14, 2014 at 5:05 pm

Dear Sir

I am getting consolidation pay without HRA, can i eligible for HRA Exemption

Reply

Abhinav Gulechha May 14, 2014 at 6:36 pm

Dear Sir

In case of consolidated pay, the HRA allowance amount bifurcation will not be available. I am not sure in this case whether you will be able to claim exemption or not.

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Avisek Dutta May 28, 2014 at 10:07 am

Hi Abhinav,

I have to rent a flat in Navi Mumbai. The owner is ready to provide the PAN card details since the rent to be paid is more than 1.62 lacs per annum. Also the owner would be providing signed rent receipts copy and the payment would be made by cheque/online transfer. However, if the rent agreement is not registered or notarized, will there be any problem for me to claim HRA? Thanks.

Reply

Abhinav Gulechha May 28, 2014 at 11:48 am

Dear Avisek

if you are claiming HRA through your employer, some employers insist on having a “registered” agreement, so please check what is your employer’s policy in this regard. Even if you are not able to claim through your employer, you can always claim at the time of filing your tax return.

Registration of rent agreement is NOT a necessary requirement for claiming HRA exemption under Income Tax Act.

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Sumit Athare May 29, 2014 at 8:48 pm

Hi Abhinav,

I have a house in Mumbai for which i am paying the EMI. This house is on the name of my father and me jointly. Recently,I need to shift to pune for job, where i am paying rent to my flat owner. But as pune and mumbai is nearby I stay in pune from Monday to Friday and on Saturday to Sunday i am in Mumbai.
I pay a fix amount to my father every month as rent.

My wife and daughter, who are dependent on me, stays in mumbai house for all the time.

I want to know whether i can claim for interest and principle portion of which i am paying EMI?
At the same time can i claim HRA deduction of both the rented places, on the ground that my wife and daughter stays in mumbai house and also joins them on weekend.

My father is ready to provide declaration, for Income from house rent in his tax filling.

Please reply,
Thanks & Regards,
Sumit Athare.

Reply

Abhinav Gulechha May 30, 2014 at 11:31 am

Dear Sumit

For Pune house, you can claim HRA deduction as you are staying there because due to professional reason. For Mumbai house, you can claim your share of deduction of interest and principal for co-owned house. You cannot claim any HRA deduction for rent paid to father for Mumbai house.

Reply

Sumit Athare May 30, 2014 at 8:29 pm

Hi Abhinav,

If i show that my wife and daughter stays in different place in kalyan separately and i stays in pune due to job, can i get deduction for rent for both the house.

I am going to show kalyan rented house as 8000 and pune as 8000.

Please advice.

Thanks & Regards,
Sumit

Reply

Abhinav Gulechha May 30, 2014 at 8:45 pm

Dear Sumit

Is the Kalyan house same as the Mumbai house you co-own with your father? If yes, you cannot claim HRA for that house. If its a different house, even then I dont think you can claim it because if you read the provisions of HRA it requires the employee to be living in that rented house. So, since you are mainly living in Pune house, you can claim of Pune house only.

But this is my personal view, you can take a second opinion on this if you want..

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Miss R Y Chauhan June 6, 2014 at 7:05 pm

Mr. Gulechha, Please guide me. I am getting HRA from my employer. I have transferred the full amount of rent together by a single cheque in Feb 2014 to landlord’s account. Can I claim for exemption now ? Is it necessary to get rent receipt month wise from landlord?

Reply

Abhinav Gulechha June 7, 2014 at 12:06 pm

Dear Ms. Chauhan

Its perfectly OK if you have transferred total rent amount by single cheque. You can calculate exemption with the help of the post, and then deduct HRA amount from salary income and show the reduced income in the return. No, there is no need of a month-wise receipt.

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Miss R Y Chauhan June 7, 2014 at 8:19 pm

Thanks a lot Mr. Gulechha. Let me clarify one more point, I have already paid tax through my employer and now house rent is not mentioned in my form 16. Under which head I can show house rent paid ? Is there any need of more proofs of house rent paid ? I am having one house rent receipt and cheque detail in my account statement on the name of landlord.

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Abhinav Gulechha June 9, 2014 at 1:33 pm

Dear Miss Chauhan

You will have to deduct HRA exemption amount from the income from salaries as per your Form 16. Suppose your income from salaries in form 16 is Rs. 100 and HRA exemption amount is Rs. 10, then just show only Rs. 90 as income from salaries in Form 16. No, you dont need any more proof. Just file your rent receipts and cheque details in your income tax file, if required later.

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Rajeev June 7, 2014 at 4:44 pm

I worked in two companies during 2013-14 and when i left first company, i missed to submit rent recipts hence they gave a tax statement as no amount exempted against HRA. Also in my new company they were locked the proof submission before march and i payed my LIc during March end. now i have the form 16 from my current employer with total salary from previous employer as taxable earning and also not able to get savings against LIc paid. could you help to know how i can file my returns now and avail tax exempion for the rent paid and LIc premium?

Reply

Abhinav Gulechha June 9, 2014 at 1:31 pm

Dear Rajeev

There is no problem. Just collate the amounts of incomes as shown in both company’s form 16. From that amount, deduct the HRA exemption amount. Also, in the deduction claim 80 C deduction for LIC premium that you paid in the return. In this way, you will get HRA exemption as well as 80C deduction in the return. If you face any problem, let me know.

Reply

sethu July 28, 2014 at 2:20 am

Hi ,
I have a question on similar/same grounds as rajeev , in such a case do i need to submit LIC receipt and rental recipts

Reply

Abhinav Gulechha July 28, 2014 at 1:19 pm

No, you dont have to submit the rent and LIC premium receipts anywhere. Just retain in your file for record.

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B. Chauhan June 10, 2014 at 2:58 pm

Dear Sir,
I left my 1st company in November 2013, but I could not furnish my rent receipts. Now in 2nd company I receive payment as STIPEND (which does not contain any head as HRA but they provide accommodation). Now problem is neither in 1st company’s nor in 2nd company’s form 16 contains HRA exemption. How can I avail tax exemption for rent paid for period of stay in 1st company through ITR filing? And what documents I should keep ready?

Reply

Abhinav Gulechha June 11, 2014 at 8:12 am

Dear Mr. Chauhan

If in your first company, you were receiving “House Rent Allowance” as a salary component, in that case you can claim exemption in your return (even if not mentioned in your Form 16) but if not, you cannot claim. As you said, in second company, HRA is not given, so for second company, you cannot claim HRA exemption

For documents – just maintain the rent receipts with you – no need to submit anywhere.

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Gaurs June 17, 2014 at 10:15 am

I have my Form16 from my organization and I find that I had missed the entries against HRA, ( aroud Rs.3000 per month). Now while filing ITR I see that i have a “tax payable”. Can I somehow include this HRA feature to reduce/nullify my current tax liablity.

Secondly I have resigned from my current job, and going for higher studies, so claiming the due HRA for the next FY doesn’t serve any purpose. Can I claim the HRA for the FY: 2014-15 without any proofs/declarations provided at my company ? (Form16, and challans already available)

Please guide.

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Gaurs June 17, 2014 at 10:23 am

As mentioned in some earlier posts I see that we can claim it in the ITR, but in that case should I update the”INCOME UNDER SALARY” in the section SCH TDS1 “Details of tax deducted at source from salary” to reflect the salary paid(-deductions under 80C etc) to reflect the HRA deduction also ??

Secondly the Challan Details provided by the company shows “AMOUNT PAID/CREDITED” with the 80C deductions but without HRA ( which was missed by me)… Will it be valid to update the income under salary for SCH TDS1 anyway??

Reply

Abhinav Gulechha June 17, 2014 at 11:44 am

Dear Gaurs

In the TDS sheet. you need to fill exactly as per the form 16. In the sheet for “Income details”, refer row 41 where you need to enter “Income From salaries” as per Form 16. There, you enter the income as per form 16 LESS the HRA deduction. It will be taken care of automatically in the tax payable calculation.

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Abhinav Gulechha June 17, 2014 at 11:31 am

Dear Gaurs

For filing return for financial year 2013-14, from the income from salaries as shown in Form 16, just deduct the HRA exemption amount as shown in the post. That is it.

Second question I could not understand. Whatever form 16 for FY 2014-15 you will get in May 2015, you can same way deduct HRA exemption amount and file the return next year.

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Gaurs June 17, 2014 at 11:40 am

Thanks for the prompt reply, But my concern is that my company has shown a different “AMOUNT PAID/CREDITED” in the TDS Challan, Won’t this create a rejection of ITR if I file a different amount in the ITR??

The ITR verification people might never come to know that the HRA was missed in the “income under salary” which is why there is a difference and they may reject the ITR.

Thanks in advance.

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maneet June 27, 2014 at 5:29 pm

.

Dear Sir,

can I get refund of Income Tax where I forgot or failed to submit rent slip to the employer . Actually till last year my salary is not taxable but this year I received some incentive for that now my salary is taxable.

Thx
Manjeet

Reply

Abhinav Gulechha June 28, 2014 at 7:18 pm

Dear Maneet

Even if you forgot submitting rent slips to employer and employer did not give you exemption because of that, you can calculate the HRA exemption amount yourself and claim at the time of filing the return..let me know if you face any issues.

Reply

GHOUSE July 31, 2014 at 10:33 pm

Hi Abhinav,

I have a doubt on Claiming HRA at the time of e filling. I guess we need to calculate HRA and deduct it from “Income from Salary/Pension” column. Please confirm whether it is correct or not.

If not , Please suggest how to claim HRA at the time of e filling. Thanks In Advance!!!!

–GHOUSE

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RGA July 2, 2014 at 4:25 pm

Dear Mr. Guleccha:

Can someone, who has always been staying with parents, claim HRA and HRA exemption (without any rent-receipt)? Further, is a “rent-receipt” given from a parent to a son, staying in parent’s house, have any sanctity (legally or otherwise i.e., legitimacy)? After the parent’s death, since the house will come to belong to all the siblings (and hence there will be no rent-receipt), can the sibling continue to claim HRA/HRA-exemption?

I would greatly appreciate your response to my questions. Thanks.

Reply

Abhinav Gulechha July 6, 2014 at 11:27 pm

Dear Mr. RGA

Yes, there is no restriction in paying rent and claiming HRA benefit in case of parent-son relationship. Ensure that the parent shows rental income in the return. In case of parent’s death, the question will be on ownership – who does the house belong to – in case one of the siblings does as named in the will, then he can let out to other siblings and other siblings can claim HRA exemption on rent paid..

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RK July 2, 2014 at 4:28 pm

Dear Sir,

I could not get HRA exemption last year because I could not get rent receipts from house owner with his PAN number on time for submitting to my company payroll. I got the receipts now with owner’s PAN number mentioned on it, but they don’t have revenue stamps on them. Will I be able to claim HRA exemption while filing IT returns?

Thanks!
RK

Reply

Abhinav Gulechha July 6, 2014 at 11:23 pm

Dear RK

No problem, just go ahead and claim the HRA exemption in your return….

Reply

Venkat Sai July 3, 2014 at 5:06 pm

Dear Sir,
My HRA documents for this year are rejected by my company as i had not included the correct documents.Please tell me how to submit the returns through online. From the posts above i came to know that we have to submit through ITR-2. Is it correct ? If so what are all the documents i have to send to the IT department along with the ITR – V. Please clarify me….

Reply

Abhinav Gulechha July 6, 2014 at 11:13 pm

Dear Mr. Venkat

Which return form to choose will depend on what type of income you have. Refer this link for more clarity: http://incometaxindia.gov.in/download_all.asp

For claiming HRA exemption in return, if the exemption amount exceeds Rs. 5000 then you cannot use ITR-1, you will have to use ITR-2.

No, you do not need to send any documents to IT department. Just retain the rent receipts and rent agreement copy in your income tax file, to be produced later if required.

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Asim July 6, 2014 at 2:52 pm

Hi Abhinav,

My HRA exemption is shown as 0 as I could not show Landlord’s PAN card. But since my total rent paid is less than 1 Lac for 2013-14. So Can I claim it for tax returns though its not considered in my form 16. Also where should I show it in the online ITR 1 form as it does not show an option of HRA exemption u/s (10 (13A)).

Reply

Abhinav Gulechha July 6, 2014 at 11:02 pm

Dear Asim

Yes you can claim it at the time of filing the return. Landlord PAN is not required if annual rent is less than Rs. 1 lac so ot sure why your employer did not give you this exemption. Just calculate the exemption amount and reduce it from “income from salaries” as per form 16, and show the net figure in the return.

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Bharath Kumar July 7, 2014 at 7:37 pm

As per My Company, I can get 60% of basic salary as tax exception, Which will be around Rs. 80000/-. As I missed to claim HRA at my Company, I am trying to claim the HRA through returns. But when I provide the Rent paid as 80000 /-, only 24,000 rupees are non taxable amount for me which will give me a return of 2400 rs Only. Why it is different between claiming at company and IT Returns. Also, Do I need to Submit any proofs for claiming this 2400 rs? How can I submit it?

Reply

Abhinav Gulechha July 8, 2014 at 4:08 pm

Dear Mr. Bharath Kumar

Could not understand your query. There is no difference in calculating HRA exemption if you are getting through employer or getting on own at the time of tax return filing. No, you need not submit any proofs. Just reduce the HRA exemption amount from income from salaries as per form 16 and give only the net amount in the income tax return.

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Manoj July 8, 2014 at 4:48 pm

Dear Abhinav, thanks for spreading knowledge. I have a unique problem. My form 16 for the year contains only 3 months salary during which i was employed. i was unemployed for the remaining 9 months. I have paid rent for the full 12 month period. I couldn’t give the rent receipt to my employer and realised this only upon the receipt of for 16. Can i claim the relief now? what should be annual rent paid in ITR? 12 months or proportionate 3 months?

Reply

Abhinav Gulechha July 10, 2014 at 5:37 pm

Dear Manoj

It will be only for the 3 months period in your case. Calculate the HRA exemption taking 3 months salary and 3 months rent. Dont take full 12 months rent.

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Rock July 8, 2014 at 9:31 pm

Hi,
Thanks for the wonderful blog. However, I have a query. For the period April’13-May’13, I received HRA from my employer. Then, I was on a 1 year contract with Company X seconded to work for Company Y from June 13 to May’14. X paid me Z INR per day as salary. There is no other salary component listed in the offer letter. It is a day rate contract with X. My tax is deducted at source as per slab (30%). Can i claim HRA for the full year or only for April-May’13?

Reply

Abhinav Gulechha July 10, 2014 at 5:36 pm

Dear Rock

You can claim HRA only for the period you were living on rent AND were getting House Rent Allowance as a part of your salary. Not able to fully understand your situation basis the facts given by you hence cannot comment on the exact period you will be able to claim HRA exemption. You can calculate it at your end.

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sumit July 9, 2014 at 5:05 am

Hi Abhinav,

I get Rs 81,000 per month gross sum ss salary from my employer with no separate component as hra . I pay Rs 15,000 as rent per month .How can I claim deduction in my incone tax return for the amount paid as rent? If not, is there any other way I can claim relief in tax calculation for the amount paid as rent?

Reply

Abhinav Gulechha July 10, 2014 at 5:28 pm

Dear Sumit

In that case, you cannot claim a exemption u/s 10(13A) for HRA but you can still claim deduction u/s 80GG provided you satisfy the conditions. Read this post for more info on Section 80GG deduction: http://www.caclubindia.com/articles/most-ignored-section-80gg-deductions-in-respect-of-rents-9611.asp

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Ashish July 10, 2014 at 2:17 am

Hi Abhinav,

I pay rent to my mother. I will also show the rent receipts to my employer. Would that be fine If I show my mother’s PAN Card and state that she doesn’t have any other source of income apart from the rent received from me and as she won’t fall in the tax slab so she don’t have to pay any tax as well? Would that be fine? I mean is that legal showing the rent address same as permanent address??

Reply

Abhinav Gulechha July 10, 2014 at 5:25 pm

Dear Ashish

There is no problem in rent address being same as permanent address. Just preserve the rent receipts at your end and ensure that just in case the inclusion of rental income results in income exceeding taxable limit for your mother, she files a return and pays tax on such income.

Reply

NARAYANON NARASIMHAN July 10, 2014 at 4:46 am

My son is a salaried employee. Due to delay in the land-lord furnishing the PAN Number, the rent receipts and the PAN No. could not be furnished to the employer/BPO before the cut-off date and hence, the employer/BPO did not allow the eligibile HRA exemption on the Total Income and as such, the Form No.16 exhibits the total income, including the entire HRA received by my son in the income.

Can the eligible EXEMPTION AMOUNT be calculated at the time of filing of Return in FORM I and if so, how to show that as the first column requires the Total Income as per Form 16?

2) Is there any provision to scan the Rental Receipts and the Land-Lord’s PAN No. and attach the same to the Form 1, if such exemption could be claimed by the salaried employee at the time of filing his return?

3) For AY 2013-14, the lease agreement and receipts were furnished on time to the employer/BPO and PAN No. requirement was not there.

4) For AY 2014-15, the requirement having been insisted upon, belated furnishing was declined by the employer/BPO and hence, my son had to pay the tax on the total income including his entire HRA.

KINDLY ENLIGHTEN THE PROCEDURE.

Thanks and Await your advice.

Narayanon, N
July 9, 2014

Reply

Abhinav Gulechha July 10, 2014 at 5:22 pm

1) Can the eligible EXEMPTION AMOUNT be calculated at the time of filing of Return in FORM I and if so, how to show that as the first column requires the Total Income as per Form 16?

Reply: In that section, please enter the amount as per form 16 LESS the HRA exemption amount as per your calculation.

2) Is there any provision to scan the Rental Receipts and the Land-Lord’s PAN No. and attach the same to the Form 1, if such exemption could be claimed by the salaried employee at the time of filing his return?

Reply: No, that is not required. Just maintain the receipt copies in your income tax file, to be produced later on in case of scrutiny etc.

3) For AY 2013-14, the lease agreement and receipts were furnished on time to the employer/BPO and PAN No. requirement was not there.

Reply: Yes, it has started w.e.f. AY 2014-15

4) For AY 2014-15, the requirement having been insisted upon, belated furnishing was declined by the employer/BPO and hence, my son had to pay the tax on the total income including his entire HRA.

Reply: No issues, please claim exemption at the time of filing of return for AY 2014-15.

Reply

NARAYANON NARASIMHAN July 10, 2014 at 9:13 pm

Dear Shri Gulechha,

Thanks for your immediate response, which is a great relief for a senior citizen like me, who during my service in a private sector, never allowed any permissible and eligible exemptions under Tax Laws, to go unavailed and paid tax only on what exactly is payable.
- Just browsed the lap-top to find a way out if i could ask my son to claim the eligible HRA exemption at the time of filing Form I for AY 2014-15, I came across on google+ search your blog and decided to seek your esteemed advice.

Thanks a lot again.

Regards.

Narayanon, N

Reply

Abhinav Gulechha July 10, 2014 at 9:15 pm

Sir it’s MY pleasure to be of any help and I am so happy it helped u in some way…I should say thanks to you:)

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NARAYANON NARASIMHAN August 18, 2014 at 10:16 pm

Sir,

With reference to the subject matter regarding HRA Exemption to be claimed by my son, his BPO at his request have filed the E.Return ITR 1 on 31st July 2014, taking an exemption for HRA @ Rs.2000 p.m.

Now, to claim the exemption under HRA taking into account the actual rent paid by my son ( for which he has necessary receipts for all the 12 months of the FY 2013-14 and also the land lord’s PAN Number), am I to file a Revised ITR 1 or ITR 2 showing the Income as per Form 16 Less: HRA exemption actually eligible.

Kindly advise.

Thanks and Regards.

Narayanon, N

Reply

Abhinav Gulechha August 20, 2014 at 6:22 pm

Sir request you to please check with your CA regarding this.

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Sree Ranjini July 10, 2014 at 1:39 pm

I am a salaried employee. I have not submitted the HRA proofs to my employer on time since I was outside India. My employer has not taken into account HRA deductions and is refusing to give revised form16 as tax has already been paid.

While filing IT return online , I see two possible places where I can make HRA deductions

– “1 Income from Salary / Pension (Ensure to fill Sch TDS1) ”

– “19 TDS1 “Details of Tax Deducted at Source from SALARY [As per FORM16 issued by Employer(s)]” – > “Income chargeable under the head Salaries”

My question is

1.Where to make HRA adjustments?

Should I enter the exact details as in form16 under TDS1 ( say Rs. X ) and subsequently make the HRA adjustment in “1 Income from Salary / Pension” = Rs X – HRA deduction

Please advise.Thank you in advance

Reply

Abhinav Gulechha July 10, 2014 at 5:19 pm

Dear Sree

Kindly keep the TDS section exactly in line with your form 16. Calculate the HRA exemption and then deduct it from the Income from Salaries as per “1 Income from Salary / Pension (Ensure to fill Sch TDS1)” and show only the net amount there.

Trust this helps.

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Sree Ranjini July 10, 2014 at 5:45 pm

Thank you over much Sir

Reply

Abhinav Gulechha July 10, 2014 at 6:04 pm

You’re most welcome:)

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DrHaresh Mulani July 10, 2014 at 7:05 pm

Dear sir,

I am salaried person. My employer has not mentioned any HRA exemption in Form 16. I have done the calculation and according to your calculator mentioned in the post and i.e near about 27K. Now i am getting confusion that which ITR form i have to file? My NSC and LIC details are also not mentioned in form 16. Can i ask for the revised Form 16 or can i claim same in the return?

Please help me to select correct ITR form.

Reply

Abhinav Gulechha July 11, 2014 at 12:01 pm

Dear Dr. Haresh

If your source of income is only salary/ other sources and exempt income is more than Rs. 5000 (as in your case, it is Rs. 27K), you can file your return in ITR 2.

Reply

Bharath July 12, 2014 at 1:27 pm

Dear Abhinav,

Thanks for such a good blog, it provides many information,

however i do have one doubt,

we have a pvt ltd company and our family members are directors to it, dad and Bro, so we give them the annual remuneration to them, now my bro lives with his family in a seperate house…but as part of form 16 we have not shown any HRA component in it.

Question is?

1) can my bro deduct 96K as HRA/rent from the gross salary and then file the Return?

ex say 5LK as salary
9600 exempt from transport
and 96000 rent 8K per month

so that means 394400 should be the return filed?

if this doesn’t work what is the alternative…

Please help thanks in advance.

Appreciate always!

Thanks

Reply

Bharath July 13, 2014 at 12:31 pm

any info please?

Reply

Abhinav Gulechha July 13, 2014 at 7:31 pm

Dear Bharath apologies for delay in reply. If salary component does not have HRA then your brother cannot claim HRA exemption. He can evaluate claiming deduction u/s 80GG. Going forward, just modify the salary structure to include HRA component and he can then sure claim HRA exemption as per calculation given in the post..

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Bharath July 14, 2014 at 11:46 am

thank you so much!

Reply

Abhinav Gulechha July 14, 2014 at 2:07 pm

You’re welcome Bharath

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Arijit July 12, 2014 at 5:51 pm

Dear Abhinav,

Thank you for this article. This is very informative.
But I have some doubt regarding HRA. I changed my company in sept 2013, I did not submit my rent receipt to my previous employer for the duration of Apr-Aug 2013. Now I want to claim that amount during IT return. How can I do that? Is it fine If I fill ITR-1 online with “Income from Salary / Pension (Ensure to fill Sch TDS1)” row filled by deducting the unclaimed HRA amount from gross total income from both the company? OR should I need to fill ITR-2 form for that. Because it is mentioned there If exempt income more than 5000 use ITR-2. Does this unclaimed HRA amount comes under exempt income?

Please help.

Thanks

Reply

Abhinav Gulechha July 12, 2014 at 6:50 pm

Yes Arijit you need to fill ITR 2 form. Just deduct HRA exemption and show only the net salary income…

Reply

Selva July 13, 2014 at 1:55 pm

Dear Abhinav,
While joining the job i didn’t opt for HRA (it was default 0% value) but now i am staying outside of my home and paying rent. In my salary slip, HRA component is not there (everything is coming under special allowance). From above discussion i am feeling that i cann’t claim HRA (Am i right?).

Thanks
Selva

Reply

Abhinav Gulechha July 13, 2014 at 4:48 pm

Yes Selva you are right..

Reply

Vasan July 14, 2014 at 8:40 pm

Dear Abhinav,
Excellent blog about the income tax filing and thanks for helping the others.

My form 16 for the year contains 8 months salary (from April to Nov) during which I was employed. I was unemployed for the remaining 4 months due to closure of our department. But as a part of settlement my company has given 2 months’ salary (notice period salary) plus 3 months’ salary (survival salary) in December. I submitted rent receipts till November with landlord PAN number and my company has accepted the documents. I paid rent for 12 months to my landlord.

My queries are :
i) Shall I claim HRA exemption for 8 months or 12 months at the time of IT filing ?
ii) Which form i have to use for claim (ITR-1 or ITR-2). I don’t have any other income other than salary, no home loan , no capital gains etc. My rent is Rs 23000 per month.
Thanks in advance for your help.

Reply

Abhinav Gulechha July 15, 2014 at 5:23 pm

Dear Vasan

Thanks for your query. In my view, you should claim HRA for only 8 months and not the full 12 months as you were not in employment for the remaining 4 months. As regards which form to use, if the exempt income is more than Rs. 5K (which it most likely will be in your case), you will need to fill ITR 2. Hope this helps.

Reply

Bharath July 15, 2014 at 3:45 pm

Dear Abhinav,

apologies for asking different question in the HRA thread.( i was not able to find the relevant thread)

During Last FY i changed my job, hence i got payment for the balance leaves at 22K

I believe we can claim this 22K under Section 10(10AA), but we dont see that in ITR2 instead we can put this amount in “Other allowances in section 10″ , (need to use ITR2 because exempt amount is more than 5K)

please help us, your confirmation is driving 20 odd friends who are waiting :) and they all have learnt a lot from your blog and appreciate a lot.

any other things we need to consider to claim this?

actually many people are not aware of this, may be if you can post a thread about it that would be really helpful.

thanks
bharath

Reply

Abhinav Gulechha July 15, 2014 at 5:18 pm

Dear Bharath

Thanks for the appreciation. On changing job, leave encashment is taxable but you can claim partial exemption u/s 10(10AA) – I have not been able to write a post on that but you can refer this link on how to calculate exemption – http://www.charteredclub.com/leave-encashment-tax/

I take it as your feedback to write on this aspect and will do so shortly.

Reply

Manu July 16, 2014 at 8:12 am

Hi Abhinav,

Nice blog ,i need your help in below scenario :-

I worked in company X from April till mid of August,now when i received Form-16 from them, they havn’t deducted my HRA from that and the income is shown as taxable. It is my mistake that i didn’t furnish the rent Reciepts while leaving the organization. Now question is, shall i deduct that HRA amount from my Taxable income in my ITR-1 return .

I am not having any rent receipts for it, as i moved to new city and also my landlord never gave rent receipt as i never met him in personal and i was transferring rent amount online. So i have only proof of payment of rent is ONLINE transaction. So incase incometax officer ask me for HRA documents will they be fine with my account statement of online transfer .Also what maximum penalty i can have incase he is not satisfied.

Thanks,
Manu

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Abhinav Gulechha July 16, 2014 at 5:25 pm

Dear Manu

Cant say – depends from AO and AO and it will arise only and only if your return gets picked up in scrutiny. If you have honestly paid rent that too via bank account, my advice will be to calculate the exemption and claim it in the return. In the meanwhile, see if you can get rent receipts, or if you have a rent agreement signed by landlord which contains the rent amount, that will also do – try to keep atleast some evidence on record.

On the penalty bit, worst case if the AO is not satisfied, he can treat it as concealment of income and levy a penalty u/s 271F which ranges from 100% to 300% of tax sought to be evaded.

My advice is not to worry too much and go ahead. But in your future rentals, make sure to clear the rent receipt aspect before hand itself:)

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Pranita July 16, 2014 at 12:54 pm

HI

I did not get any HRA component in Form16, can i still claim 24000 in 80GG section by decalring in Form 12BA and meeting those conditions?

DO i need to file ITR1 or ITR2?

Thanks
Pranita

Reply

Abhinav Gulechha July 16, 2014 at 5:19 pm

Dear Pranita

Yes, you can claim deduction under Section 80GG but there are conditions on how much deduction you can claim, I have not written on Section 80GG but refer this post: http://firstbiz.firstpost.com/money/how-to-get-rent-deduction-when-you-dont-get-hra-exemption-48589.html

Assuming you have only salary and some bank interest income, you can use ITR 1 if exempt income is less than Rs. 5K. If more than 5K, then use ITR 2. Exempt income means your exempt conveyence allowance, PPF interest, income from sale of equity shares/ mutual funds etc.

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Bharath July 16, 2014 at 9:55 pm

dear abhinav,

on a similar note there is a lot of confusion on which ITR to use in our ofice ITR1 or ITR2,

from the income tax website i got to know below link which has list of exempt income

http://www.incometaxindia.gov.in/publications/9_Income_Tax_For_NRI/Chapter003.asp

My questions will be

1) My friend receive FOrm16 where hra is shown as 50,000 (greater than 5k) so does this mean he need to file ITR2?

or

2) say HRA or tax exempt income was not shown in form 16 but as part of salary we get it so in order to claim that amount and based if is greatr than 5K then ITR2 is it?

sorry for long questions….just that all our friends are learning a lot from you.

Thanks
Bharath

Reply

Abhinav Gulechha July 17, 2014 at 3:02 pm

Dear Bharath

Thanks I am glad to help out in whatever small way possible. Replies are as follows:

a) Yes, if in form 16, the exemptions like HRA, conveyence, medical reimbursement etc. are more than 5K (Which in 99% of cases it will), a person needs to file ITR 2 and not ITR 1.

b) Even if the HRA exemption is not given in form 16, if you wish to claim in the return by reducing from the “income from salaries” as given in form 16, and exemption sought to be claimed + exemption already given in Form 16 is greter than 5K, then you need to use ITR 2.

Hope this helps.

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Bharath July 17, 2014 at 10:06 pm

super….thanks a lot buddy… all doubts are cleared…actually many of my friends and colleagues have filled ITR1,….i will let them know.

Thanks again.

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Abhinav Gulechha July 18, 2014 at 12:05 pm

Thanks Bharath, glad it helped. Yes, spread the word that its ITR 2 that is to be filled & not ITR 1.

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Abhinav Gulechha July 16, 2014 at 5:20 pm

One more thing. Even though HRA is not in form 16, if you get HRA as a part of your salary, you can claim HRA exemption in your return

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Pranita July 16, 2014 at 8:51 pm

thank you so much!

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Abhinav Gulechha July 17, 2014 at 3:34 pm

Most welcome:)

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PRADEEP July 17, 2014 at 12:07 pm

Hello Sir,

I have left my company last year Sept 2013 and joined another company in Oct 2013 in different city. During beginning of the year 9April 2013, I have submitted HRA receipt and Rental agreement. I was paying Rent 9000 per month. The income Tax department has sent circular in the month of Dec 2103, to furnish Landlord’s PAN Card if Rent is more than 8,333/- per month. Because of this, I couldn’t submit PAN details in my previous employer and they have considered HRA as taxable. I have contacted my Previous Landlord and he is not agreeing to share PAN details. I have HRA receipt and Rental receipt for the same. i was transferring rent amount online and can I submit this as additional proof instead of PAN details.

Reply

Abhinav Gulechha July 17, 2014 at 2:53 pm

Dear Pradeep

I belive your employer has not given you the tax exemption. No worry, just claim the right amount of exemption, deduct that amount from “income from salaries” as per your form 16 and show the net amount in your income tax return. Keep the rent agreeement and receipts in your file, no need to submit anywhere.

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PRADEEP July 17, 2014 at 3:45 pm

Thank you sir.

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Abhinav Gulechha July 17, 2014 at 3:45 pm

Most welcome:)

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Manish Kumar July 18, 2014 at 12:27 am

Hi Abhinav, I switched my Job in the month of September. I submitted my Rent Receipts/PAN card details and other documents in February to the previous organization. They acknowledged documents at that time. However non of them got considered on the Form 16 provided by them. When I contacted them about the same they are saying, they did not considered documents since I was not working with them when I submitted the documents. Please suggest what I can do in this scenario.

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Abhinav Gulechha July 18, 2014 at 12:04 pm

Dear Manish

Dont worry. Calculate the HRA exemption in 2 parts – for the period you were with company A and for the period you were with company B and then sum up both the exemption amount. this is your HRA exemption for the year. When you file ITR for the year, sum up the income from salaries from both employers and deduct this HRA exemption amount from it, and report the NET amount in the ITR as “Income from Salaries”.

Any issues, please feel free to revert.

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Vikadakavi July 18, 2014 at 5:26 pm

Thanks for the post and your answers for all the comments is greatly appreciated.

1. My HRA given in Form 16 is 82,215. My Basic salary is 181,275. I am in a non metro, So 40% of basic is 72510 (181275 * .4). So I am entitled for only 72510. Right?

2. If my annual rent (7500*12 = 90000) minus 10% of basic salary (18127.5) = 71873 is lesser than 72510, then 71873 will the HRA exemption amount. Right?

3. In my form 16, HRA exemption u/s (10 (13A)) shows as 54,810. My employer did not include my HRA exemption for the first 3 months. So I am claiming it via ITR2.
This is for others. The exempt amount greater than 5000 considered here is 72510 or the amount I am claiming now (72510 – 54810). Please confirm.

4. My salary is 562339. So my salary in IT return will be 478349. 562339 – ( Conveyance Exemption (9600) + Tax on Employment (1880) + HRA (72510)) Right?

5. My employer did not specify any HRA for the first threee months. So while filing return, can I calculate for the full year or should I exempt the first three months?

Thanks in advance

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Abhinav Gulechha July 18, 2014 at 8:11 pm

Dear Sir

Please appreciate that I cannot answer individual queries. If you have any specific issue, please let me know. As what I could guage from your questions, if you were not receiving HRA for first 3 months, your CANNOT claim HRA exemption for that period.Yes, the HRA exemption will be deducted from the income from salaries as per form 16 and net amount can be shown in tax return.

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Amrita Sen July 21, 2014 at 2:54 pm

Hi Abhinav,
I forgot to declare in HRA, but I am paying more than Rs.5000/- per month for house rent and I have all valid receipts.Can I display the paid amount for house rent in IT return file?

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Abhinav Gulechha July 21, 2014 at 6:13 pm

Dear Amrita

YES. Just calculate the HRA exemption as I have given in the post, and while filing the return, deduct that amount from “Income from Salaries” as per Form 16.

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Sahana Rao July 24, 2014 at 12:56 am

Hi,
I worked for a company A till July 2013.In company A payslip i had HRA component as i had declared it at the start of financial year.And i had already submitted the proofs till july in the same company.But When i switched to company B in August
i missed to do the HRA declaration at the start of my work(Company site was blocked after a given date.But i could have declared nearly 9000 rupees per month as HRA component).Hence HRA component was not part of my payslip.But i live in a rented house and pay 15k rent.Can i now show proofs for HRA when i file my IT returns? Or is there any other way through which i can show this proof? Or can i do it as u mentioned -Section 80GG.

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Abhinav Gulechha July 24, 2014 at 5:08 pm

Dear Sahana

No problem. I assume Company B also gives you HRA component. Fine, you need to do this: Calculate HRA exemption for the year in 2 parts – company A and company B and then sum it up – lets name this as A. Now, sum up the HRA exemption shown in both companies form 16 – lets name it as B. Now, calcualte the difference A-B – this is the HRA exemption you are entitled to, but did not get – lets call it C. Now, when you file the return, sum up the “Income from Salaries” in both companies form 16 AND deduct this C. That is the net salary income you will have to show in the return. Do get back if this does not clarify your query. Thanks.

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Rohit Jha July 24, 2014 at 11:47 am

Hi Abhinav,
I have changed my company once during 2013-14.I have 2 queries:
1) I forgot to submit the claim to avail tax exemption for medical expenses in my previous company. Can I claim them in ITR? what documents do i need to possess for that?

2) I forgot to claim the HRA component. Can I claim the same in ITR. I have the rent receipts but the agreement is in my wife’s name. WIll that work as a proof if asked for verification?

3) How often is that the IT department asks for proofs of exemptions claimed in ITR since the refundable tax in my case based on HRA and medical expenses is coming out to be around 10K?

Thanks and Regards
Rohit Kumar jha

Reply

Abhinav Gulechha July 24, 2014 at 4:48 pm

Dear Rohit

Reply to your queries is as follows:

a) Are you referring to the Rs. 15,000 medical re-imbursement. Yes, you can claim now. Just ensure that you have the original copies of bills in your tax file.

b) If you are paying the rent, it does not matter if the rent agreement was in wife’s name. Calculate the HRA exemption, and claim in return. Preserve the receipts and bank statement copy containing monthly debit of rent amount from your account, for extra safety.

c) Dont have any idea on that. Dont take stress. If you have a genuine claim & you could not get deduction just because your employer did not give, you can definitely claim at the time of return. You need to produce proofs only in a rare case your file is picked up for scrutiny, but thats not very common.

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Rohit Jha July 24, 2014 at 5:21 pm

Hi Abhinav,

Thanks a lot for the helpful reply. I have a particular doubt related to HRA of my previous company.
1) I left the previous organization on 29th October, 2013. So the HRA for that month will be lesser than those of other months.
2) I forgot to collect the monthly payslips from April 2013 to October 2013 (I have those only for a couple of months in that period) and now they can’t provide the same.
3) Referring to the couple of payslips which I have, i see that the HRA is not constant for those months (for some strange reason) and hence I need to calculate the HRA exemption per month as per the rules. I can’t do that for the months for which the payslip is not with me.
4) Though I have the HRA figure from 1st April 2013 to 29th October, 2013. So if I calculate the HRA for the full period it will differ from the actual HRA i can claim.

I know this is a tricky situation hence I would like to seek your advice on what I should do.

Thanks and Regards
Rohit Kumar Jha

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rohit jha July 25, 2014 at 5:50 pm

Hi Abhinav,
A gentle reminder if you could take some time off from your busy schedule to address my query above, that would be really great.

Thanks and Regards
Rohit Kumar Jha

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Abhinav Gulechha July 25, 2014 at 6:17 pm

Dear Rohit

My apologies, I missed your e-mail. Just take your basic salary and Dearness allowance, if you get it as part of retirement benefits, for purpose of computing HRA exemption. These details will be there in the appointment letter of your previous company. Calculate it on a per month basis and then multiply by no. of months you worked in your previous company. Don’t aim for perfection in your calculation, reasonable is OK:)

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rohit jha July 28, 2014 at 6:08 pm

Hi Abhinav,

Thanks a lot for the helpful replies. I really appreciate the pain you take to reply to so many queries so patiently and effectively.

Regards
Rohit Kumar Jha

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Abhinav Gulechha July 29, 2014 at 12:06 pm

Dear Rohit

Thanks for your encouraging words. You made my day:)

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Johnny July 24, 2014 at 4:26 pm

Hi Abhinav,

For the year 2013-14, from the month of april-dec(Rent 8500), i stayed in a house and from jan-march(Rent 13500) in another. Due to some mess, when Im supposed to claim my HRA, I missed providing the rental agreement to my company on time. Due to this, I had a huge deductions from my salary for the month of feb and march.

Now the question is, is there a way I can claim my lost income in the form of tax through returns? One of the tax consultants I spoke to says, it seems to be NOT POSSIBLE.

Thanks & Regards
Johnny

Reply

Abhinav Gulechha July 24, 2014 at 4:41 pm

Dear Johnny

The tax consultant is wrong. You can claim the deduction. You will have to first correctly calculate the HRA exemption – in your case, it will be in 2 parts as the rent amount got changed. Then just deduct HRA exemption amount from “Income from Salaries” as shown in Form 16 and show the net amount in return. Preserve the rent receipts/ agreement etc. with yourself, no need to submit anywhere. Hope this helps.

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Johnny July 24, 2014 at 5:47 pm

HI Abhinav,

Thanks for a favorable and a timely reply, it brought me some relief.

Im actually very poor at understanding this taxes and financial stuff.

Please can you guide the process for claiming my refund for the HRA exemption?
Im sorry it might take your precious time but could you please help?

NOTE: I had already provided my form-16 for IT returns to the tax consultant this morning.

Thanks & Regards
Johnny

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Abhinav Gulechha July 25, 2014 at 9:50 am

Hi Johnny

Please appreciate that it will be very difficult for me. Just speak to your tax consultant and explain him, he will hopefully do the needful.

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shubham July 24, 2014 at 11:30 pm

Hi,

What proof do i need to submit in case I have forgotten to put HRA in the investment and deductions declaration filed to the employer ? Basically, the HRA amount is not reflecting in my form16, but I have paid it. What proof do i need to submit and where do i need to submit it to show the HRA deduction in the IT return ?

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Abhinav Gulechha July 25, 2014 at 9:45 am

Dear Shubham

You dont need to submit any proof. Just claim the exemption in the return and retain the house rent receipts & agreement copy in your income tax file.

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A Kumar July 25, 2014 at 9:41 am

Hi Abhinav,

It is a very wonderful and detailed article.

I have just one query on whether Society Maintenance expenses paid to landlord can be covered under rent paid and eligible for HRA exemption or not.

Thanks a lot.

Regards

A Kumar

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Abhinav Gulechha July 25, 2014 at 9:44 am

Dear AKumar

Thanks for the appreciation, NO, society expenses maintenance expenses do not qualify.

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A Kumar July 25, 2014 at 10:04 am

Thanks a lot dear for an immediate response.

I have by mistake added it in HRA exemption and declared by landlord PAN as well. Now my landlord is asking me to not to consider it while filing my return. But my form 16 contains that exemption now. How do I handle this situation as my landlord will not be showing it (maintenance expense) as rental income in his return.

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A Kumar July 25, 2014 at 10:09 am

Hi,

Just one more piece of information.

May please also advise on this aspect that I am paying maintenance expenses to my landlord only as part of rent agreeemnt and the he is paying it directly to society. Will it still be considered not part of rent or it will be considered.

Thanks a lot for your reply.

Regard

A Kumar

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Abhinav Gulechha July 25, 2014 at 10:12 am

If it forms part of rent then you can claim

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A Kumar July 25, 2014 at 10:18 am

Thanks Abhinav ji once again.

The clause is mentioned as follows and maintenance expenses are paid every month. Please advise on what is your understanding of whether maintenance expenses forms part of rent or not.

“The Licensee agrees to pay the Licensor
i) a sum of Rs.11500/- per month towards rent and amenities for the above mentioned flat and also
ii) pay applicable maintenance charges (@Rs.1200/p.m. at present) every month as fixed by the Apartment owners’ Association. These rents and maintenance charges are payable before the 5th day of all calendar months in respect of preceding month whether demanded or not.”

I fully appreciate your instant response to my queries and thanks a ton for the same. I am delighted as a learner.

Regards

A Kumar

Reply

Abhinav Gulechha July 25, 2014 at 12:15 pm

Dear Akumarji

You’re most welcome. I went through the wordings where maintenance expenses are clearly segregated from rent. In my view, you cannot and should not claim society maintenance. If you want to still claim it, take a second opinion from your CA. Thanks.

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A Kumar July 26, 2014 at 2:47 pm

Thanks a lot once again. Just wanted to know and take help from you on how to adjust it in ITR as it is shown in my Form 16 and against landlord’s PAN no. Now my landlord is asking me to not to consider it while filing my return. But my form 16 contains that exemption now. How do I handle this situation as my landlord will not be showing it (maintenance expense) as rental income in his return.

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sandeep V July 25, 2014 at 4:14 pm

dear abhinav,

company has given me a CLA, i was not told (i was not having knowledge)that this will impose perquisite and the HRA will not be counted,i have told the company to take back the CLA & terminate but since this was for 11 month they declined to do so.
I have been hitted hard by non inclusion of my HRA for deductions.

Can i file the HRA exemption with ITR ,in form 16 they have mentioned 1 month HRA and rest as CLA.
PLs suggest

Thanks

SV

Reply

Abhinav Gulechha July 25, 2014 at 5:29 pm

Dear Sandeep

No, I am afraid you cannot. Here since its a leased accomodation, it will qualify as “perquisite” and you cannot claim HRA exemption. If you feel this is a losing proposition, you should speak to your employer and surrender the CLA. However, first do a proper cost benefit analysis between both options before arriving at a conclusion.

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Sahana Rao July 25, 2014 at 4:45 pm

Hi Abhinav,
Thankyou for your response.
Company B would have given me the HRA component if i had declared it initially.But as i missed to declare it they have not given me that component in my salary.Even my Company B form 16 does not have HRA listed.Is ther any way i can still get tax exemption?
One general question .I just found one of your previous replies “Even though HRA is not in form 16, if you get HRA as a part of your salary, you can claim HRA exemption in your return”.My assumption was Form 16 will not have HRA only if HRA is not part of salary.Is it possible that HRA is part of salary n still not present in form 16?

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Abhinav Gulechha July 25, 2014 at 5:44 pm

Dear Sahana

We are lost, lets admit it:)

OK, lets start with appointment letter: If HRA is not present in your appointment letter, as part of your salary structure, question of HRA exemption does not arise (you can still claim deduction u/s 80GG, but its a different issue). If HRA is part of your salary structure, then there can be 2 things – you either live on rent or you live in own flat. If own flat, then HRA is fully taxable. But if you stay on rent, you are eligible. Here also 2 things can happen – you can either produce rent receipts and all, and your employer gives you an exemption – in that case, it will show in Form 16 as an exemption. If employer does not consider it, it will not show as exemption in Form 16 BUT still you have a right to claim the exemption at the time of filing your tax return.

As per my previous comment, in case the entry for HRA exemption is not there in form 16, you can calculate it yourself and deduct it from the salary income as shown in Form 16.

Hopefully it clarifies. Do share if you face a problem.

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Benudhar Sahoo July 25, 2014 at 11:21 pm

Dear Sir,
For this financial year 2013-14, I got Rs.471326.00 Salary, company deducted the tax only after leaving 1.0 Lakh exception and not Calculating any HRA although at time of Appointment it is written Rs. 23333.33 basic and 11666.66 is HRA but they are not calculating that with 10% and surcharge, they deduct Rs. 17647.00 and From Intrest from SBI I got Rs 13341.00 and get TDS deduction of Rs 1046.00. I am staying in a rented house which rent is Rs 9000.00 the owner is saying she has no PAN card and I have the only agreement and I am giving the rent by online transfer to her sons bank account, and have no rent receipt.

Please advise how to claim HRA in incometax refund

Regards,
Benu

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JRJ July 26, 2014 at 2:48 am

Hi Abhinav
There is a condition in ITR 1 form that exempt income should be less than Rs,5000. Whether HRA exemption is included in above exempt income?

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Abhinav Gulechha July 26, 2014 at 9:18 am

Yes JRJ

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A Kumar July 26, 2014 at 2:48 pm

Thanks a lot once again. Just wanted to know and take help from you on how to adjust it in ITR as it is shown in my Form 16 and against landlord’s PAN no. Now my landlord is asking me to not to consider it while filing my return. But my form 16 contains that exemption now. How do I handle this situation as my landlord will not be showing it (maintenance expense) as rental income in his return.

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Abhinav Gulechha July 28, 2014 at 1:14 pm

Dear Akumar

In that case, you are not responsible as to how your employer or landlord show in form 16 and tax return respectively. In my view, you should show only the “rent” for HRA exemption purpose. Add up whatever deduction is given in form 16, and what ever is the correct HRA exemption as per your calculation (refer the calcuator given in the post), deduct THAT from the income from salaries and show the net amount in the return. Hope this helps.

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stuti July 28, 2014 at 3:19 pm

Dear sir

I have a housing loan in which my mother who is above 60 years is the joint owner. She receives rent in her account which she passes to me. I live in another city and claim HRA. If i have to declare rent as my rental income will that be fine. We have given my mother PAN to tenant and rent is less than Rs 1 lakhs

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Abhinav Gulechha July 28, 2014 at 4:23 pm

Hello Stuti

Yes, you can and must show the rental income in your return. You can get HRA exemption only if the reason for staying on rent is due to business/ profession requirement. As regards PAN, you do not need to give PAN to tenant – there is no such requirement, why did you do it?

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stuti July 28, 2014 at 7:36 pm

Actually tenant was a bank employee and his rent is paid by the Bank only. Also does deposit amount is also considered as rent income?

So now the net case is :

I stay at Bangalore for work reasons and pay rent here. My flat is at Mumbai. Rent and deposit goes to my mother account whose PAN was provided as she was there at that time. She is a senior citizen. I take rental amount from my mom’s account every month. She is a joint owner. I pay housing loan emi evry month and my mother has nil source of income.

Now please tell me the best legal way to declare tax return in this case

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Abhinav Gulechha July 29, 2014 at 12:16 pm

Dear Stuti

If its a refundable deposit, it does not qualify as rent. You will have to declare rental income (full) in your return and pay tax on it. Give YOUR PAN to the bank who has taken the flat on rent. You can also claim the interest and principal deduction for your flat in Mumbai.

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Rohit July 28, 2014 at 6:02 pm

Hi

I have not declare the HRA amount .Can i get exemption while filing income tax return by considering the deduction amount.
Either some other way to fill for HRA.

Suggest please

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Abhinav Gulechha July 29, 2014 at 12:06 pm

Yes you can calculate HRA exemption amount and adjust in income from salaries as per Form 16, at the time of filing the IT return.

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Karthik July 29, 2014 at 8:48 am

Hi ,
Hi,

If we have take house for lease, can we claim HRA?

Ex: I have paid 5,00,000.00 to my owner and no need to pay rent for house and they won’t pay any interest on that. But I am incurring some minimum interest on 5Lacks, so can I calaim that interest portion under HRA?

Reply

Abhinav Gulechha July 29, 2014 at 12:17 pm

Dear Kartik

Unfortunately no, it does not qualify as rent for purpose of availing exemption under HRA.

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Dhiraj July 30, 2014 at 10:37 am

Hi Abhinav,

Please help with my doubt.

when filling itr2 should i enter the calculated hra or actual hra i have received from the company?

Thanks
Dhiraj.

Reply

Abhinav Gulechha July 31, 2014 at 12:14 pm

Dear Dhiraj

In exempt allowances field, enter the “calculated HRA exemption”

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Anish July 30, 2014 at 11:34 pm

Hi dear Abhinav,

Thanks for all the info i read in your blog.

My doubt is like….
1. I’m getting My HRA component in my salary is Rs.2,200 p.m. Im paying rent of Rs.2500 p.m . Im eligible for exemption of 2200*12 months =Rs. 26,400/- . Am i correct?
if yes, I don’t get any rental receipts from my landlord. So, as my rent is less than 3000/-, am i eligible for this exemption u/s 10 HRA component and apply for refund directly!

if yes can i directly less this component from my Gross salary as per my Form 16 ?
My form 16 is not having anything exempted u/s 10.

2. Transport Allowance U/s 10:

I’m a marketing person. I heard that there is an exemption for every employee for transport of amount Rs.800 p.m.

Can i less the 800*12=9600/- directly from my head salary component in Form 16?

If yes , how do incomtax people come to know that this component is regarding transfer allownace? as there is no specific field given for this in quick e filing.

Sorry if i’m too confusing :) but these are my immature taxation doubts.

-Thanks & Regards,
Anish

Reply

Abhinav Gulechha July 31, 2014 at 1:20 pm

Dear Anish

Information over blog comments will confuse you more and in a rare case, can lead to an incorrect return as well. I request you to seek help of a professional CA.

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Manas Ranjan Kar August 6, 2014 at 12:33 am

I am staying at Panchkula (Haryana) in a rented house. I am planning to purchase a house in Dhakoli (Punjab) which is adjacent to Panchkula and is less than 10 Km from my current rented house. In most of the articles on net I found that if the rented house and the owned house are in two different places then we can avail both HRA & home loan benefit. My question is in my case though the two flats are in different places indeed states but are too close to each other. Can I avail both HRA & home loan benefit?

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Adnan Motiwalla August 7, 2014 at 10:05 am

Hi,

I am currently working in Bangalore and also pay rent for my parents based in Pune. In this case can I claim HRA for the Pune house.

Thanks

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Rahul August 8, 2014 at 2:47 pm

dear Sir,
I am doing a private job drawing a salary of 50,000 per month having HRA of Rs.7500/month and my wife is doing a government job drawing HRA of Rs.3100 /month.Now as per rule of the state our combined HRA should not exceed Rs.6000 monthly ,in that case my wife will not be entitled for HRA,how do I present my salary or change components of salary so that both can claim their respective HRA.We stay in same house and my wife travels from one district to another to do her job.Sometimes she stays in her parents house which falls in the same district as her office.Kindly Advice.

Reply

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