Here's How Salaried Employees Can Claim House Rent Exemption When Filing ITR - Viral Bake

If you are a taxpayer and staying in a rented house, then you, as per the rules, can claim an exemption for the rent paid when you file your ITR.

Usually, one claims this exemption through their employer by submitting house rent receipts. But for any reason, if you haven’t claimed allowances through your employer, you can still do it through other courses.  

ITR penalty
Source – Financial Express

Here is how a salaried employee can claim HRA in ITR

To claim House Rent Allowance (HRA) exemption, you would first need to calculate how much of the allowance is taxable. This is done by following the below-mentioned rules.

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Suppose these are your details of the salary. Here, note that HRA is not the rent you pay. It just means House rent allowance in Income Tax and is mentioned to simplify taxes. It’s mostly half the amount of your BASIC SALARY. You can always ask what’s your HRA from your employer.

Now assuming that your salary is 13,000. Here is how you will calculate how much of the allowance is ‘taxable’.


a) Actual HRA received (Rs 15000 x 12 = Rs 180000)
b) 50% of salary if living in metro or 40% for non-metro cities (Rs 25000 x 50% x 12 = Rs 150000)
c) Excess of rent paid annually over 10% of annual salary [(Rs 13000 – 2500010%)12 = Rs 126000]

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Whichever of the above three amounts is less (126000) is your taxable home allowance. After calculating the HRA exemption, taxpayers can claim it while filing ITR. When you file ITR, you need to mention this data in the ITR form.

HRA in ITR
Source – IndiaFilings

The taxpayers are required to provide the break-up of salary, which means the basic salary including all allowances. Then you have to enter the allowances that are not exempted.

For HRA, you have to enter the non-exempt part of HRA and other allowances that are not tax-exempt. Worth mentioning here is that taxpayers will also have to declare the amount of HRA they are claiming as an exemption.

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The last date for filing ITR for FY20 has been extended to January 10, 2021.


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