Quick Facts of Income Tax Benefits on House Rents

Quick Facts of Income Tax Benefits on House Rents Aditya Construction Company Hyderabad

Generally, employers pay the HRA (House Rental Allowance) for the employees living in a rented house and Income tax laws provide benefits to the employees for people who do not own home and live on rent and who do not receive House Rental Allowance.

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Tax benefits on House Rents are of two types: i) Employees who receive salary and receive HRA from their respective Employers and their Tax Benefits

Under Section 10(13A) of the Indian Income Tax Act, an employee has entitled tax exemption as per the House Rental Allowance received by the employer. Furthermore, the accommodation of the employee should be in the same location where he or she Aditya Construction Company Hyderabad

is employed.

Another important point is that employee should be neither a co-owner or sole owner in the accommodation that he or she is paying rent and living there. However, the exempt amount related to House Rental allowance will be the lowest of the following.

Actual House Rental Allowance Received 50 % of the salary of the Aditya Construction Company Hyderabad

employees staying in metropolitan cities of Kolkata, Delhi, Chennai, Mumbai or 40 % of the salary for the employees living in non-metros of India.

If the excess of the rent paid over 10 % of the employee salary.

In the above the term Salary includes DA (Dearness Allowance) and Basic Salary and any commission that is fixed. For the procedure of computing the Aditya Construction Company Hyderabad

exemption, the salary for the period of which the employee paid to is considered. Furthermore, there would be no tax benefit related to House Rental Allowance if the rent do not exceed 10% of the employee salary for that relevant period. ii) In another instance where Rent Paid by the employee and who are not the receipt of House Rental Allowance If you are a self-employed or an employee who does not receive any HRA from the employer, you can claim tax benefit under Section 80G Aditya Construction Company Hyderabad

of the Indian Income Tax Act, and this tax benefit is allowed on individuals Total Income.The deduction is restricted to either 25 % of total income or any excess rent paid that is over 10 % of the individual’s total income.

Furthermore, the maximum deduction that an individual can claim is 60000 in a year.

Furthermore, If your minor child or spouse owns any residential house in the same region the employee you or the member of HUF and owns the property you cannot claim this tax benefit.

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