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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August 25, 2011 at 10:38 pm
Sir,
I borrowed home loan to which I have paid fully. Now, company has started to deduct more income tax from my salary & no benefit for HRA which is being paid as Rs.10500/ p/m
Please tell me the way, how can I save my income tax now ?
August 27, 2011 at 7:20 am
Sir,
I am salaried employee. I stay in house jointly owned by my parents.
My mother is in lower tax bracket. Can I pay the entire rent to my mother and claim HRA or Do i need to pay to both in proportion as per ownership ratio and claim HRA ?
August 30, 2011 at 11:44 pm
I understand the post is too old to expect the answer for my query but still I would like to put forward my query. My query may be a silly for few, however please bear it with me and also excuse me for the same.
I have been in software profession for a long now and I recently joined a new organization (say in August). New organization demanded for Form 12B from my previous organization (having complete details of my income and tax paid) which eventually I submitted. I made some declarations at the start of the financial year in my previous organization and based on that my tax deductions happened. Now my current company is considering my complete salary (from my pre. company) as a taxable whereas the salary also contained some tax free components like HRA and others. Also my current company is allowing me to take tax benefit of HRA starting from August. So, how to handle this situation where in my HRA and other components of 4 months (April-July) is being treated as taxable income.
Suggestions from anyone reading the post and having resolution are welcome and appreciable.
Waiting for the reply.
September 2, 2011 at 11:31 pm
dear sir,
i have purchased a house with housing loan and leaving in the house.
can i claim HRA benefit along with interest and principle paid.And how much?
regards
atul
September 2, 2011 at 11:38 pm
My parents are living in different city. They have rented a house. Can i get the exemption for the rent paid for them and how much?
regards
atul
September 8, 2011 at 1:52 am
My wife is the sole owner of house and is central govt employee, i am working with PSU and entitled to self lease which is much higher than HRA. My question is can i take lease, in that case my wife shall be entitled to HRA from central govt. Please advise.
September 13, 2011 at 1:48 am
Hi,
I found your blog very helpful.
My query is something different than HRA but I guess you will be knowing. I booked one under-construction flat in April’ 2009 but I have not got possession till date. If I want to sell the same flat what would be tax implications on the same [till I have not got possession].
Thanks,
R.A.
September 13, 2011 at 11:34 pm
I took VRS and currently am earning around 5 L per annum through various investments. Since I stay in a rented house and my son is school going, I would like to know how much can I claim on my rent and education as part of filing tax returns
September 21, 2011 at 10:51 pm
I am owner of triple story flat in delhi and i hv given my floor on rent. I receved 12000/-pm so how many tex i hv to pay and next time (from april 2012) i want to run pg in my flat dn should i regestsred my pg or not pls tell me the rule ®ulation about pg as soon as possible
September 28, 2011 at 12:27 am
hi,
if a married female receives an HRA, can she pay the rent. if the house she stays in after marriage belongs jointly to her husband and uncle.
Can she pay rent to her husbands uncle and claim HRA deduction
Pls advice
Thanks !!
October 18, 2011 at 5:20 am
Hi,
My house rent agreement is in my wife’s name. She is a housewife and has no source if income. As the sole money earning member, can I claim HRA.
Regards,
Neil
October 18, 2011 at 10:19 am
Hi ,
I have a query. I stayed in noida in a rented appartment. I had bought a house in Ghaziabad on a home loan , which is under construction . I have claimed HRA for my noida appartment where i currently reside.
Can I claim both interest and prinicipal benefits for my own house in ghaziabad which is under construction ? Is NCR considered as one city ?
I had submitted letter of interest/principal from the bank at the time of submitting evidences but had not claimed the interest benefit. Now I am filing the IT return , can i claim for the interest benefit of my home loan.
Regards
Jaspreet
October 20, 2011 at 8:33 pm
Hi,
I am a senior citizen.For many years I worked abroad.My employer
is a company in UAE.I get consolidated lumpsum amount per month.
Most of it-nearly 65% is spent on house rent in Mumbai.
Can I claim tax exumption.? The rent is paid by crossed cheques and
eventhough there is no rent receipt,the bank statement mentions it.
Regards,
Kulkarni
October 28, 2011 at 11:37 pm
Hi,
I own a house jointly with my wife and both of us are paying EMI (50% each) from our accounts.
I get HRA from my employer.
We both live in the same house.
Can I submit rent receipts taken from my wife against rent transferred online from my account to her account for the purpose of HRA exemption.
I am also claiming the deduction against payment of interest portion.
October 30, 2011 at 4:50 am
Iam an IT employee & took a home loan of 10 lakh for tenure of 20 yrs. for my house renovation. W are three brothers in family.My father is the owner of the house. I pay monthly EMI of 10k.
My question is can i get a tax exemption even if iam not the owner of the home but paying the EMI?
November 22, 2011 at 10:42 pm
Hi,
Myself Nilesh,
In mumbai i have two flats, one is on my wife name and one on our joint name.
1. we are staying at my wife’s flat
2. We have given our jointly owned flat on rent of 10000
also i have farm at my native place and i am cultivating that farm (4 acre) on my own. i stays at my native place on parents house for every saturday, sunday to cultivate the farm.
my query is, can i show the rent paid to my parents for native house as HRA to get the tax benefit.
i am staying every saturday, sunday and also keeps my all equipments in that house from last year.
November 23, 2011 at 9:59 pm
Dear Sir
I have a house loan but the possession has not been given yet. I am staying in a rented house. My questions are:
1.Can I claim for income tax rebate on house loan?
2. Is it possible to claim income tax rebate on house loan and HRA simultaneously as I am currently paying rent as well as EMI of house loan together?
Regards
Sudhanshu
November 23, 2011 at 11:20 pm
Dear sir,
Namaskar and regards,
It is humbly requested to clarify following points regarding HRA to working couples.
1.I am govt PSU employee and allotted PSU owned accomodation and giving perquisite tax for it.Hence HRA can be considered as Perquisite and not a part of salary.
2.My wife is govt employee and authorities are not paying HRA on pretext that govt qtr has been allotted to one of the employee.
Sir I have read somewhere that according to 6th pay commission accommodation allotted by PSU shall be considered at par with accomodation provided by private company as perquisite is deducted,according to this my wife is eligible for release of HRA
kindly clarify with applicable rule.
Also I remember that I have read somewhere if housing loan is existing in the name of any one or both of the employees than spouse Will get HRA even if govt accommodation is allotted.kindly clarify with applicable rule.
IT is humbly requested to clarify these two issues I shall be thankful to you.Also it is requested to quote relevant rules…ANIL…..Regards.
Email:verma.anil@rediffmail.com,09478511555.
November 26, 2011 at 2:44 am
Sir,
I am salaried person and getting 66000/- per month. Hou much income tax i have to pay and how much I can save tax by investing in other govt. sector, here I am paying 9000/-pm as house rent.
Second thing I am paying Housing loan EMI 11613/- but flat is under construction condition so hou can I get the benefits of this EMI.
Regards
Shaikh
November 28, 2011 at 10:34 am
Dear Sir,I have not receved any reply for query dated 23rd nov 2011.Pl do reply at the earliest please……Anil Verma
December 7, 2011 at 6:40 am
Hi,
I own a flat in Delhi which is on rent and i am leaving in another rented accomodation in delhi. i work in an MNC in Noida. I have a HRA component in my salary but my Employer refused to give me the tax rebate on it (in form 16) as he says that they can give this benefit if my rented accomodation is closer to office then my own house (which is on rent). So i claimed it seperately in my tax filing, now IT department does not accept it, they says that they can accept it only if it is reflected in my Form16 (provided by my employer). I have read in your article, that HRA benefit is acceptable if we have a genuine reason. so my reason of leaving in rented acco is,
1. my wife is working and her office is very close from our rented house (as compared to owned one).
2. We have a small kid (3 yrs) and since we both are working, hence we want to stay close to our in’laws house so that they can take care of our kid when we are in office, our rented house is very close to them, however my own house is not close.
do you think these are the genuine reason to claim HRA benefit.
what should we do to claim that in the current situation where our employer is not ready to incorporate it in Form16 and IT department is too not ready untill it is reflected in Form16.
thanks and regards,
Sumit
December 13, 2011 at 11:02 pm
One person taken housing loan for 3 yr. he given that for it purposes, the loan has closed on last march itself, whether is eligible for house rent for this year, because loan was taken in his name only
December 19, 2011 at 10:15 am
my salary details is :
BASIC – Rs 363,756
HRA – Rs 201,252
CONV – Rs 9,600
MED. – Rs 15,000
BONUS- Rs 30,301
——————–
Total Rs 6,19,909
Service at MUMBAI and my permanent residence at Ajmer, house loan paid to I.C.I.C.I. bank PM 3155 x 12 = 37860 Rs. yearly (Intt.Rs. 12895+24965 Rs. Principal amt).
Investments is 1,20,000+20,000 L&T INFA BOND=1,40,000 Rs.
House Loan case HRA EXEMPT : 2,01,252/- Rs. (ACTUAL HRA PAID AT MUMBAI 2,22,000 Rs. (monthly=18,500)…AM I WRONG OR CORRECT WAY OF HRA EXEMPTION rs.2,01,252/-…? PL.REPLY ON MY EMAIL ID : jainmp1961@gmail,com…
December 19, 2011 at 10:19 am
my salary details is :
BASIC – Rs 363,756
HRA – Rs 201,252
CONV – Rs 9,600
MED. – Rs 15,000
BONUS- Rs 30,301
——————–
Total Rs 6,19,909
Service at MUMBAI and my permanent residence at Ajmer, house loan in my name and paid to I.C.I.C.I. bank PM 3155 x 12 = 37860 Rs. yearly (Intt.Rs. 12895+24965 Rs. Principal amt).
Investments is 1,20,000+20,000 L&T INFA BOND=1,40,000 Rs.
House Loan case HRA EXEMPT : 2,01,252/- Rs. (ACTUAL HRA PAID AT MUMBAI 2,22,000 Rs. (monthly=18,500)…AM I WRONG OR CORRECT WAY OF HRA EXEMPTION rs.2,01,252/-…? PL.REPLY ON MY EMAIL ID : jainmp1961@gmail,com…
December 20, 2011 at 10:15 pm
Hi,
I am staying with my sister.
Is it possible to claim HRA
and can u please explain me how to do that?
December 22, 2011 at 3:23 am
We were living in rented house from april 11 to nov 11, and now in dec we shifted to our own house . Can we apply for hra deduction up to nov and for remaining period ( dec to march 12) intrest and principal deduction. loan is joint(husband and wife) Can we both take tax benefit
December 23, 2011 at 9:24 pm
I am staying in my own flat in Chennai.At present there is no homeloan.
Since my work place is far off I am staying in a rental house alone and every week end I will go to my own house.
I am getting HRA.Can i claim EXEMPTION
December 23, 2011 at 11:26 pm
Hello M.Venkataramani,
Yes. You can claim the HRA exemption.
Thanks,
Krishna
December 28, 2011 at 9:02 am
Hi,
I work with an IT firm and my Base Location is Bangalore.
I am currently working at my client site in Mumbai and will be in Mumbai for at least 1 year.
I plan to give up my Rented House in Bangalore & Rent a New House in Mumbai. Can I claim the HRA for my New Rented House in Mumbai, while my base location continues to be Bangalore in the company records ?
To summarize, it is necessary that I can claim HRA benefit FOR ONLY THE RENTED HOUSE which is in the SAME CITY as where I am working ? In other words, can I claim HRA benefit for a Rented House (Rented in my name) in a different city, different from where I am presently working.
Regards,
Suvadeep
December 29, 2011 at 3:13 am
Hi,
I own a house and my parents are staying in the same city. I am staying with parents and not given my flat on rent. I am paying rent of 20K pm to my parents, will I be able to claim:
a) Housing loan principle amount
b) House Loan interest amount
c) HRA.
December 29, 2011 at 11:46 pm
Hi,
I am salaried person having 7650.00 PM HRA component.
I am leaving on rent and paying 6000 PM. But as i am the only earning person in family, i also Pay such expense to my parents for their monthly expense as they are leaving at other place.
Can you please suggest me the how much HRA deduction can be claimed for the exemption. Can i cover the expense which i paid for my parents at another place too?
January 3, 2012 at 4:21 am
Hi,
m paying rent to ma elder brother for staying with him every month. so will i get a tax exemption?
January 3, 2012 at 5:07 am
hai..
i am living with my friends and rent amout inr 6700/- per month.we are share (total 3 person) to pay the rent amount.in this case how much amount to show for income tax declaration.(6700/3)
January 4, 2012 at 10:53 pm
Hi Krishna,
I stay with my parents and house is co-owned by my mother and father. Do i have to make agreement with both of them? or I can make agreement with only my mother/father. This is because if I make agreement with father he have show that in his income. on the other hand my mother is housewife. so that we all will be in mutual benefit.
Thanks.
January 9, 2012 at 1:50 am
Sir, i have been gettin HRA, but my actual rent paid is more than the HRA.. How i can claim the deduction for the following amount…
January 9, 2012 at 2:56 am
Hello Sir,
I am staying in my own house and it is registered in my name.
however it was purchased by my father 22 years ago and he got registered in my name in 2005 for certain reasons.
The house is not purchased by me and i was minor at that time.
I even give monthly maintanance amount to my parents.
even though it is registered in my name morally it is my parents property
Can i claim HRA on this ground.
Thanks,
Anand R
January 9, 2012 at 9:56 pm
Hello Sir,
I am living with my house. This house is in the name of my father,who is not alive.
Moreover I have declared my mother as dependant at my employer.
I am going to have possession of a property in the March’12,which is in the name of myself & in the same city.
In above scenario, can i claim HRA exemption,rent agreement,rent slip in name of my mother ?? ( in turn I am paying rent to my mother)
Hoping to be favoured…
Thanks,
John A
January 13, 2012 at 12:18 am
HI,
I have a home loan for a property purchased in NCR 7 years back( joint ownership with my father). He is staying in this property .
I have another house in NCR which i have purchased with joint ownership with my husband and we are staying in the same house .
Can i claim the loss of interest for both the properties.?
January 13, 2012 at 4:39 am
R/SIR
PLEASE CLEAR MY POINT
ONE OF MY FRIEND RESIDING IN NON METRO CITYAND HIS SALARY IN THE F-Y 2010 -2011 AS UNDER
BASIC -RS 16300/-PER MONTH=195600 P.A
CONV. RS 2500/-PER MONTH=30000 P.A
OTHER BONUS/EXGRATIIA RS. 37600 PER ANNUM
HOUSE RENT DIRECT PAY BY COMPANY TO LANDLORD -RS 6000 P.M X12 =72000P.A
INVESTMENT ARE UNDER
P.P.F RS 25000
TUTION FEE FOR TWO CHILDREAN RS. 20200
PLEASE CLEAR THAT HOW MUCH H.R.A EXEMPTION HE CAN RECEIVE & HOW MUCH TOTAL TAX HIM TO PAY
January 16, 2012 at 4:21 am
Can i pay House rent to my mother if i am living with my parents .Though house is in name of my father but he has his pension after his retirement.
January 19, 2012 at 8:18 pm
Two people are staying in a rented house and one person is not paying the rent but both the names are there in the lease agreement so it is possible to get a declaration letter (noc) from the other person that he is not paying the rent and and can i get full HRA exemption.
January 22, 2012 at 1:49 pm
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January 28, 2012 at 9:21 am
I am working in Bangalore and have rented 2 different houses in Bangalore. Can I claim HRA exemption producing rent receipts for both houses? I pay the rent for both houses.
January 29, 2012 at 4:39 am
sir,
I am central govt.employee
I receieve 1985 as HRA and I pay Rs.2500 as a rent for rented house as I have not gotten a govt. quarter .
Now I want to know what exemption I will get and wheather it is necessary to produce rent receipt and PAN of landlord.
January 30, 2012 at 12:20 am
Under which section it is give that husband cannot pay rent to wife. I agree on the same but need to know u/s it given in income tax
January 30, 2012 at 12:22 am
Can u please povide the section of income tax which say its disallowed if husband pays rent to wife …its for my input
January 31, 2012 at 5:57 am
Sir MY wife and I are working in a same department. clarify please can both my wife and I show tax deduction as HRA?
February 6, 2012 at 8:46 am
Hi krishnas, i m in Govt Job i added my father in my medical card and take medical reimbursement for his treatment about Rs 35,000 Is this amount taxable? and i also want rebate in HRA rent paid to my father. Can i take benefit of HRA. Also i booked a plot i m paying loan interrest for that . Can i take rebate on that interest too, i havn’t got possession for that
thanks & regards,
Pramod
February 9, 2012 at 8:03 am
Hi krishnas, i m in Govt Job i added my father in my medical card and take medical reimbursement for his treatment about Rs 35,000 Is this amount taxable? and i also want rebate in HRA rent paid to my father. Can i take benefit of HRA. Also i booked a plot i m paying loan interrest for that . Can i take rebate on that interest too, i havn’t got possession for that, Kindly reply
thanks & regards,
Pramod
February 13, 2012 at 6:51 am
if my parents are my dependents, can i give house rent to them, and can i claim HRA rebate in income tax?