In my previous article I have explained about the HRA and Tax Benefits. This article explains the HRA exemption for tax savings and how to calculate the allowed limit for HRA exemption. But, doesn’t talk much about the rules or different scenarios involved while applying for the HRA deduction. The scenarios may not be the same while every one apply for the HRA deduction.
It depends on the nature rental house and the relationship with the house owner you may get doubts whether you are eligible to claim the tax deduction. This article intend to explore few of the important scenarios while applying for HRA. if you have any points or doubts in your mind and it is covered in the article please post it in the comments section. I am happy to answer all your queries. If you like the article you may be interested in subscribing our future articles here.
also read:
1. Rent paid to Parents
You can claim rent given to your parents. If you stay with parents and paying them the rent, they will be land lords and you can show that in the tax deduction as HRA. Note that your parents has to show the rental income in their records to avoid any litigation in the future.
2. Rent paid to spouse
You cannot give rent to your spouse and show that in the records. The relationship between spouse is not to be considered as the separate.
3. Keep your rent receipts safe
If the HRA is upto Rs.3000 per month, then the rent receipt is not mandatory. Otherwise you will have to submit the rent receipt proofs to claim the tax deduction.
4. Home Loans and HRA
If you bought a home and repaying the home loans, but some real reasons you could not stay in the home. You can get the tax benefits on the following categories:
- Home loans principal repayment
- Home loans interest paid
- HRA Benefits
Example 1: If you taken home loan to buy a house in Chennai city. But, your work location is in Bangalore. In that case you will be allowed to claim the following benefits from the Income Tax :
- Tax benefit on principal repayment under Section 80C
- Tax benefit on interest payment under Section 24
- HRA Exemption
Example 2: If you taken a home loan to buy a house in the Chennai city and the house is not ready to occupy. You are staying in the rented accommodation. In that case you will be allowed to claim the following benefits from the Income Tax :
- Tax benefit on principal repayment under Section 80C
- Tax benefit on interest payment under Section 24
- HRA Exemption
You can claim tax benefits on the housing loan only if your home is ready to live in during that financial year. Once the construction on your home is complete, the HRA benefit stops.
Example 3: If you taken a home loan to buy a house and you are not staying in that house because it is too far from the work location or any other genuine reason. The home is given for rental. In that case you will be allowed to claim the following benefits from the Income Tax :
- Tax benefit on principal repayment under Section 80C
- Tax benefit on interest payment under Section 24
- HRA Exemption
However, please note the rent you receive would be considered as your taxable income.
Update: If your total rent payment exceeds Rs.180000 in a year (it means Rs.15000 per month), you have to submit the PAN card copy of the landlord (read more).
Summary
In this article I have explained about the rules related to HRA exemptions. If you have doubts on how to calculate the HRA eligibility, please read the article about HRA and Tax Benefits. I hope you have enjoyed this article and looking to declare the Tax Planning for 2009. If you have any doubts, please post it in the comments section. I will be happy to answer all your questions. Happy reading!!!
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December 30, 2010 at 2:50 pm
hi,
sir i have query regarding hra,city compancetary allowence & leave encashment.
1.Iam living in my own house,can i show my hra under exemption .
2.Does city compancetary allowence comes under tax exemption.
3.My erraned leave encashment got sanctioned. cash is not yet credited in to my account .Do this amount attracts tax.
January 1, 2011 at 8:51 am
Hi Krishnaji
Wishing U A Very Very Happy New Year
Pls. clarify whether grade pay is included in calculating the basic pay for the purpose of HRA exemption calculation for central govt employees.
Madan
January 3, 2011 at 2:58 am
Hi Krishna Ji,
this is really wonderful that you are spending time to help tax paying community so much !!
I have a specific issue . I live in my house which i have taken loan on and getting tax benefits on this under section 24. I want to claim HRA for the new house purchased by my mother as i will shift there and my parents would stay in my present house. Can i get HRA benefits ?? both the houses are in the same city / Sector.
If my accounts deptartment does not agree , can i file that in ITR and claim that amount back ? do i need to ensure a certain way of showing this while putting my ITR.
Please help me …
January 3, 2011 at 5:32 am
Hi,
I have house in chennai for which i have taken a home loan and completed the same which i have rented out and i am showing the same as addtional income in Form 12 c
Recently i have purchased second house and availed home loan in Joint name myself and My wife. we got the completion certificate from builder in oct 2010 but due to certain constraint we are not staying in that house neither rent out . But we are staying in different rented house.
1. Can i claim HRA
2. I will show rent as addtional income for the first house.
3. Can i show the Principle Repayment made for the second house component under 1 Lac deduction .
4. Can i also avail the deduction of the interest paid during the year actual till Mar 2011.
January 6, 2011 at 5:49 am
An employee is claiming various deductions applicable for loan on house property and is also claiming HRA fro another property by paying rentals for the same.however communication address given to the company is for the property where housing loan is taken . Is this tenable
January 6, 2011 at 3:24 pm
I am staying in my own house and my sponsoring my retired parents living in same locality in their own house. I am paying them 20,000/month. Can I claim HRA?
January 9, 2011 at 9:49 am
Hi Krishnaji,
Awaiting your reply.
January 16, 2011 at 10:58 pm
i am getting HRA from my employer(PSU) 30% of basic pay ,i am residing in my own house ,can i claim Tax benifit :
Tax benefit on principal repayment under Section 80C
Tax benefit on interest payment under Section 24
HRA Exemption
January 16, 2011 at 11:00 pm
i have taken loan and paying emi
January 18, 2011 at 5:00 am
Hi
I have a Apt @ Bangalore which is owned by me & my wife. My Parents are staying @ my house & we are residing @ pune. My wife is also working.
My question:
1. Can we both claim the interest paid to home loan.
Regards
Sunil
January 19, 2011 at 8:50 am
Hi
I am paying rent for a house but I am living with my parents in a different house. Can I claim HRA?
Thanks
January 29, 2011 at 5:25 am
my wife is living in other city for her education am paying her Rent can i claim it for tax exemption
January 29, 2011 at 5:25 am
my wife is living in other city for her education I am paying her Rent can i claim it for tax exemption
February 1, 2011 at 1:45 am
Hi, i have taken house on loan at bhyandar & i am staying on retal basis at bhayandar only because children school is near by where my retal house is there. please clarify can i get both the benefits in my IT-2010-11
Principal Amt.
Int. on Housing Loan Amt.
Rent paid of Rs.4000/-p.m.
February 1, 2011 at 10:49 am
Dear Krishna,
Thanks for such a nice article. It cleared out a lot of doubts.
I guess I have one last doubt remaining.
Is it compulsory to divide rent-paid in a ratio of 50:50 between me & my spouse?
Can’t we claim a it in a ratio of 60:40 or any other ratio?
Based on our salary structure a ratio of 50:50 does not seem the best option.
Thank-you again for your time.
- Arti
February 2, 2011 at 4:05 am
In 2005, I have taken a home loan for my flat in Mumbai and was staying in the same flat till I was transferred to Delhi an another city in 2009.Now my wife and kids are staying in the same flat in Mumbai and I have taken a flat on rent in delhi.Shall I be eligible to take the below benefits.
1) Housing loan principle amount for my mumbai flat
2) House Loan interest amount for my mumbai flat and
3) HRA being paid as rent in delhi
regards,
bipul
February 4, 2011 at 1:48 am
Sir,
I have own house but not having pune corporation plan sanctining & construction permission.Gunthewari proces I have done & got Gunthewari certificate but construction is not regulerised.Property tax I am paying to pune corporation.I am receiving Rs.2510/- HRA per month.Can I get HRA Exemption? Pls.guide me.
Regards,
Shahaji
February 4, 2011 at 3:08 am
I have own house but not having pune corporation plan sanctining & construction permission.Therefoe unable to take housing loan.Gunthewari proces I have done & got Gunthewari certificate but construction is not regulerised.Property tax I am paying to pune corporation.I am receiving Rs.2510/- HRA per month.Can I get HRA Exemption? Pls.guide me.
February 4, 2011 at 3:15 am
I have own house but not having pune corporation plan sanctining & construction permission.Therefore unable to take housing loan.Gunthewari proces I have done & got Gunthewari certificate but construction is not regulerised.Property tax I am paying to pune corporation.I am receiving Rs.2510/- HRA per month.Can I get HRA Exemption? Pls.guide me.
February 8, 2011 at 2:46 am
Hi Team,
My House rent allowance from Company is Rs 5280 per month . For six months of this financial year I have lived on rent and the rent paid was Rs 9000 per month. I need to know whether the exemption granted to me is 5280 multiplied by 6 or 9000 multiplied by 6.
Thanks & Regards
Amit Sharma
February 11, 2011 at 10:06 am
Dear Sir
I AM WORKING IN BANGALORE and My employer is paying the salary as below:
Basic Rs.25000
Residual Allowance Rs.27500
I am staying in a rented House and paying Rs6000/- p.m.
My query is Can I claim HRA exemption as my employer is not paying allowance in the name of HRA?
REGARDS
BALAKRISHNAN
February 14, 2011 at 8:39 pm
I am living in my own house. I have prepaid my loan more than a year ago. I am getting HRA from my employer. Am I eligible for HRA exemption or any other exemption? Pl. clarify.
February 18, 2011 at 10:08 am
Hi,
Me and my husband both are working in same PSU. till now we both are getting HRA however only husband is getting tax exemption and I am not getting exemption. Now, they have start to company lease for employees.
Now my question is, if my husband will opt for house on company lease, will I get HRA or not?
If yes, then how much (same as now)?
February 20, 2011 at 11:42 pm
hi,
i got HRA 3500 from my employer and i live with my parent .
can i get tax benifits on HRA. if yes than what i have to submit(show).
February 23, 2011 at 3:57 am
Hi,
I have a query on HRA claim.
One of my collegue is staying in Mumbai for onsite work of company. The company is situated in Bangalore. Can my collegue claim HRA deduction even if he is staying in Mumbai and paying rent at Mumbai.
Note: Company brnach is not in Mumbai. Company is solely situated in Bangalore.
February 23, 2011 at 3:58 am
Hi,
I have a query on HRA claim.
One of my collegue is staying in Mumbai for onsite work of company. The company is situated in Bangalore. Can my collegue claim HRA deduction even if he is staying in Mumbai and paying rent at Mumbai.
Note: Company branch is not in Mumbai. Company is solely situated in Bangalore.
February 23, 2011 at 11:33 pm
Hi,
I have a query, if one has home loan and is repaying through EMI regularly.
What if I quit the service by Oct in the particular FYear. How will my pervious co. calculate the Interest and repayment of principal from April to 15th Oct.
Please revert.
Thanks
Regards
Meena
February 25, 2011 at 4:31 am
I want to about HRA exemption for the purpose of tax banefit.
I am unmarried, age 30 living in my parent’s home with them. Can I claim HRA benefit for the income tax.
If so, then what documents I have to show in my office to the DDO. Is Rent Receipts are enough.
I have heard that if I claim the above benefit, I have to give the photocopies of the cheques by which I had paid the rent to my parents.
Please help me. I have to do necessary action on Monday.
Regards.
Suraj
March 2, 2011 at 2:50 am
I stay in my wife quaters, Can I Claim for HRA benefit for the income tax.
regards
kskaranth
March 8, 2011 at 5:22 am
I have a home laon runnning in Pune and I stay there itself. My parents live in Surat and I pay the rent for them.
Can I claim the Intrest on hosuing loan and HRA both in this case.
March 14, 2011 at 2:53 am
Dear Sir:
I am staying in a rented house at Chandigarh. I also own a housing loan for a house situated in Derabassi, around 20 kms from Chandigarh, which is currently unoccupied and vacant.
Can I claim both benefits of interest exemption and exemption in Housing Rent received from my employer.
Regards,
Rajesh
March 31, 2011 at 4:44 am
dear sir,
i have recevied hra from my co. of rs. 15000 & paid 16000 can i claim hra of rs. 16000.
March 31, 2011 at 4:46 am
dear sir,
i
April 11, 2011 at 7:57 pm
Dear Sir
Me and My wife are staying in two diffrent cities on the rented home due to childen education. Can i submit both receipt and avail HRA exemption.
Lalit Bordia
April 17, 2011 at 8:01 am
I am a govt. servant. I am married and we (me & my husband) are living with my parents (not with my in-laws). Can I claim for HRA? The officers in our department (MCD) said that a girl (married/unmarried) living with her parents can’t claim for HRA and they calculated my income-tax return without HRA. I submitted rent receipts, rent-agreement and photocopy of the card of my marriage.
can i claim for HRA? if yes, what should i do now?
please reply soon
Thanks
ritu
May 1, 2011 at 10:07 pm
hello sir
iam an central Gov. Employee(CISF) at present working in vishakapatanam my family is staying in chennai in rented house(5000rs).. where my children’s are doing their graduation….
MY monthly income is : 20000
is there any way of getting HRA.
Or any relief from income tax
May 17, 2011 at 11:28 pm
HI
PLZ ADVICE
if i have a house in delhi & my job in gurgoan and i am staying on rented in gurgon city so can i claim the HRA
June 4, 2011 at 10:48 pm
Dear Sir
I am working in Central Govt. and availing government quarter, thus not getting HRA. Recently my wife joined Food Corporation of India. Now I would like to know as I am having a quarter from Central Govt., my wife will get HRA or not?
June 8, 2011 at 4:41 am
Hi
I have the question that i have received HRA from my company I am living in my own house how could I avail the HRA exemption.
So that my tax liability can be reduce.
June 11, 2011 at 6:46 pm
Sir,
I have a independent house staying in ground floor and wants to construct 1st floor give for rent, to save a tax on rent is it possible to take rent onmy wife names. In existing housing loan it is not joint loan. But she has got PAN no. Not earnling more then 60K per year.
Pl. suggest what we will be slotion to save a tax.
June 17, 2011 at 10:16 pm
HRA was a part of my salary component, but now that I have quit the organisation, they have issued Form 16 without HRA stating that in those few months that I had worked I was not coming in the tax bracket, but overall I come in the 30% bracket… so how do I claim HRA without mention on Form 16… I have salary slips that mention HRA
Please suggest
June 20, 2011 at 8:59 pm
Hi,
Me and my husband are working in two different companies.
In this year I have applied for HRA which is around 9000/-.
Can I husband also applies HRA in his company eventhough I have applied complete amount here?
Iam confused with this.
Please let me know about this…
Jo.
June 24, 2011 at 1:02 am
#
Dear Sir
I am working in Central Govt. and availing government quarter, thus not getting HRA. My wife joined Autonomous body (AIIMS) Now I would like to know as I am having a quarter from Central Govt., my wife will get HRA or not?
June 29, 2011 at 4:45 am
Sir,
My income is above Rs.8 lakhs p.a.; My family is living in an appt, for which I had taken Hsg Loan and I am claiming Tax relief for the interest paid for that loan. I am working in another station and has a rented house. Am I eligible for IT rebate relief for the rent paid to the house at the place of working? If so what is the criteria, and under which section.
July 10, 2011 at 8:37 pm
Sir,
I am a lecture in engg. college. I was getting HRA for last 3 years. But suddenly management said that if u r staying with your parents then your not eligible to take HRA. Please Tell me whether they are right or wrong. Please provide me documents to show them.
July 12, 2011 at 2:04 am
De
July 12, 2011 at 2:26 am
Hi,
I have one rented house in Delhi, and shifted on deputation to Shimla for period of the period of 18 months. In Shimla I have another house on rent for me. I am getting HRA benfit for house rented in delhi from my employer. My wife and son live in Delhi, where I live in Shimla. Can I avail the more HRA benefit for house in Shimla?
(I am getting 12740 as basic and 50% of the amount as HRA)
July 22, 2011 at 5:29 am
Dear All,
I have a little confusion. actually I got some rebate u/s 10 in terms of HRA rebate. But I do not understand that in ITR-I A/Y 2011-12, where should I put that amount i.e. in 80c/80ccc…???
kindly assist.
July 22, 2011 at 8:16 am
Pls.send me updates
July 25, 2011 at 10:01 am
I bought home in pune, Maharshtra. I am repaying the loan. It’s still under construction. I live at gurgaon, Haryana. Can I claim all three benefits under HRA?