One can claim HRA exemption as well as the deduction for interest on a home loan if one owns a house but lives in a rented house. Both these tax deductions are allowed only if the house one owns and the house one lives in are at different locations and there is a genuine reason for not living in ones own house.
Can HRA and home loan interest be claimed?
Homeowners, who are paying back their home loan and getting HRA as part of their salary, can avail both the house property-related tax benefits to lower their taxable income. HRA exemption towards rent payment. Deduction on home loan interest as per Section 24. Principal Repayment under Section 80C.
Can I claim HRA for self occupied house?
The legal provisions in respect of HRA are contained in Section 10(13A) of the Income Tax Act and rule 2A of Income Tax Rules. These provisions do not provide that HRA benefit cannot be claimed if you own any house.
Is HRA taxable if living in own house?
The amount of HRA exemption is deductible from the total income before arriving at a gross taxable income. This helps an employee to save tax. But do keep in mind that the HRA received from your employer, is fully taxable if an employee is living in his own house or if he does not pay any rent.
Can husband and wife claim HRA same house?
Though HRA is included in the basic salary, its not fully taxable. You can claim tax deductions on it. To optimize the tax-benefits from the HRA exemption, you can split it with your spouse. However, if one person is in a higher tax slab, then he/she should claim a bigger chunk of the rent paid.
Can we claim HRA without paying rent?
One cannot pay rent to oneself. Hence, no exemption is available for HRA and the whole of HRA received becomes taxable under “Income from Salary”. But if you reside in a rented property, then you can claim exemption even if you own a house (in the same city or in a different city).
Can I claim HRA if I own a house in same city?
Yes, you can claim the HRA deduction and the tax benefit on a home loan even when you are living in the same city in which your home is. This can happen under two conditions; either your house is under construction, or you are living in a rented house and have rented your own house.
What is the maximum HRA exemption?
50% of the employee salary is eligible for HRA tax exemption if he or she lives in any of the Metro cities of India. In case the employee lives in any other city then 40% of the salary can be HRA exempted. The actual rent that is paid by the employee for the residence each month, minus 10 % of his/her salary.
How much HRA can I claim without receipts?
If employee receives HRA in excess of Rs. 3000/- per month, it is mandatory to provide Rent receipt to employer as an evidence for claiming HRA. Even if your HRA is less than Rs. 3000/-, try to keep rent receipts with you in case Income Tax Officer asks for them at a later date.
Can husband pay house rent to wife?
Yes, you can pay rent to my wife or spouse or parents to claim the HRA tax benefit in India. In the eyes of Income-tax, each individual is a separate entity and hence can have his own income. You can pretty well pay the rent to your spouse and claim the HRA tax exemption for your income.
Do I need to submit proof for HRA?
Documents like rent receipts and rental agreements will be required to be submitted to the employer for claiming deduction for house rent allowance. If the payment of rent is more than Rs 1 lakh per annum, then PAN of the house owner will be required to be submitted.
What happens if HRA is not claimed?
If rent receipts are not submitted to the employer: In this case, the employer would not have made the HRA exemption in the taxable salary and hence, deducted a higher TDS amount. When you claim HRA deduction when filing your ITR, the excess TDS will be refunded to you.
How do I calculate HRA if I stay in a house?
Exact HRA received. Exact rent paid reduced by 10% of salary. 50% of the basic salary if the tax-claimant is residing in a metro city. 40% of the basic salary if the tax-claimant is residing in a non-metro city.
Can you claim HRA if you dont live in a rented accommodation?
You can only claim HRA under this Section only if you are staying in a rented accommodation and paying rent. This house shouldnt be co-owned by you and also you dont own any house in the same city.