4 Rules you must remember for HRA Exemption

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:

  1. Home loans principal repayment
  2. Home loans interest paid
  3. 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 :

 

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 :

 

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 :

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!!!

Subscribe to our future article here.

email

Comments

  1. uzma says

    Hello Sir
    We are two sisters working in the same company. We stay with our parents in the same house.
    Can we both enjoy HRA exemption.
    Your reply will be appreciated.
    Thanks & Regards

    Uzma

  2. khirud says

    Respected,
    I am a govt employ getting a HR of Rs 1379 per month . As i am residing in my own house , will my yearly HR would be deducted from my annual pay for tax payment ?

    • Vikash Singhi says

      no you will not get deduction as because HRA is applicable only when you are paying rent of the house.

  3. vivek says

    Is it possible to get get HRA benefit.

    I ) I got lease in name of my parents on rented accommodation ( parenets doesn’t own that house)
    II) My parents further sublease it to me ( between my parents and me ) and my parents become my landlord.
    III) can i get HRA benefit in this case ???

  4. nitin agarwal says

    Is it possible to get get HRA benefit.

    I ) I got lease in name of my parents on rented accommodation ( parenets doesn’t own that house)
    II) My parents further sublease it to me ( between my parents and me ) and my parents become my landlord.
    III) can i get HRA benefit in this case ???

  5. Shital says

    I intend to stay in a flat that I jointly own with my mother. My parents stay in a house owned by my father in Ahmedabad. If I pay rent (50% of market rent) to my mother, can I claim tax benefit on HRA, I am not going to claim house loan interest benefits

  6. Madhav says

    I was not able to submit my rent slip to my employer. The form 16 by my employer shows my HRA as Zero for previous financial year. How to file for its tax refund. I generally do e-return for refund but this time I not able to do.Please guide me

  7. minakshi giri says

    Mr X , an employee of a PSU, posted in Kolkata and resides in Company Guest House on payment of G.H rent. He is entitled to draw 30% HRA. His family is residing in Chennai on a rented house. Mr X has produced the rent receipt of Chennai for his tax exemption on HRA. Kindly confirm whether the same is allowable by employer or not.

  8. Raj says

    Hi !!

    I joined Recently In an It Firm as Associate Software Engineer !!

    I Have no idea About HRA! I Live with My Parents ! I Kept Option Own House in My Salary information.When I See My Pay Slip i Found My HRA Is 0.
    What you Mean By 0? do I Receive HRA?

  9. Vikas says

    Hi, I live with my Parents , the Flat agreement shows three owners My Father , my mother and myself ( I have not contributed for the flat purchase ) Now I intend to claim HRA exemption, is it possible for me to claim. I am getting Rs. 7000 as HRA.
    Pl. help me with details, how to claim the exemption.
    Thanks
    Vikas

  10. Vikas says

    Hi, I live with my Parents , the Flat agreement shows three owners My Father , my mother and myself ( I have not contributed for the flat purchase ) Now I intend to claim HRA exemption, is it possible for me to claim. I am getting Rs. 7000 as HRA. I pay them rent of Rs. 9000 p.m. and shall show this income in their IT Return.
    Pl. help me with details, how to claim the exemption.
    Thanks
    Vikas

  11. Lingaraj says

    I occupy 2 rented houses in the same city. I claim HRA on one of the rented house. is it objectionable under IT rules. kindly respond.

  12. Mohan says

    Hi,
    I am an employee of PSU company which provides me an HRA of 30% of my basic pay.I live in a rented house paying Rs.6000/- in Hyderabad and parents stay in other rented house paying Rs.4500/-. Is there any way i can get tax benefit.If so, pls tell me what are the documents i need to produce.

  13. Rajesh says

    I am working in Chennai and staying in my flat in Chennai.

    Myself & my wife are joint owners of this flat.
    Can I claim HRA exemption in this case?

  14. Manish bhardwaj says

    i m manish bhardwaj goverment teacher in hindaun city in rajasthan i am living in renting house i m getting HRA Rs. 1302 per month by goverment can i get HRA exempection ? for this whats document should be submitted by me ?

  15. srinivas says

    HI,

    i have a own flat in Banglaore and where i stay currently and where as mother stays at my home town for which i pay the rent. i have rental agreement with land lord.

    can i get HRA exemption for house where my mother is staying and i am paying rent

Trackbacks

Leave a Reply