HRA Exemption
HRA Exemption Do I get a tax relief on the house rent that I pay? Yes, you get relief from your taxes on the house rent paid. You get an allowance called house rent allowance from your employer to meet the house rent expenses. It is a part of the annual salary and the Income Tax department provides an exemption from taxation on this allowance.
HRA Exemption The calculation for the amount exempt from HRA is the least of the following: Allowance actually received Rent paid in excess of 10% of basic salary Or 50% of basic salary For all metro cities of Mumbai / Kolkata / Delhi / Chennai and 40% For all other cities
HRA Exemption E.g. Considering that you stay in Mumbai a metro city If you earn a basic salary of 15,000 then your HRA component will be Rs.7,500 i.e. 50% of your basic salary. This is because it is calculated based on these exemption limits.
HRA Exemption Now suppose you pay a rent of Rs.10, 000 per month the HRA exemption can be calculated as follows: Allowance actually paid – Rs.7,500 x 12 = Rs.90,000 Rent paid in excess of 10% of salary – 10,000 x 12 – 10% of 15,000 x 12= Rs1,02,000 50% of basic salary – 15,000 x 12 x 50% = Rs.90,000
HRA Exemption The minimum of this is Rs.90,000 and hence that is the amount of HRA that is exempt from tax and hence from your annual salary. At H&R Block we make sure that we calculate the deductions accurately and you receive the maximum benefits.
HRA Exemption
Thank You..!! For more info: https://www.hrblock.in/