House Rent Allowance (HRA) allows employee to claim income tax savings for the rent paid for living in a rented accommodation. HRA calculator computes the Taxable & Exempted HRA based on your monthly income , rent paid, etc and other parameters.
HRA calculation using Fintra’s HRA calculator helps you to compute for deductions of taxes for a certain fiscal year. The HRA will assist you to reduce your taxable income for which you are accountable to be paid.
To obtain accurate results you need to provide the following data:
1. Annual Basic Salary
2. Annual Dearness Allowance
3. Annual HRA received
4. Do you reside in a Metro city
5. Monthly Rent Paid
When all data has been filled into the Fintra's House Rent Allowance HRA Calculator click on “Submit”, and instantly results will be displayed.
House Rent Allowance (HRA) is the part of an employee’s salary provided by the employer as compensation for house rental expenses paid by the employee. The house rent allowance is regulated by the provisions of Section 10(13A) of the IT Act.
The HRA Amount that the employer pays to its employee is based on certain parameters that include the salary and the city of residence. Only salaried individuals living in rented accommodations get the benefits of HRA. If they stay in their own house and does not pay rent, then they cannot claim the HRA.
HRA is calculated on the employee’s basic salary, dearness allowances and any other commissions. In case, the employee does not receive a dearness allowance (DA) then the HRA will be 50%/40% of the basic salary based on the residence city of the employee.
The calculation for HRA is based on the lowest of the following three provisions:
• Amount received as HRA from the employer.
• Actual rent paid less 10% of the basic salary.
• 50% of the basic salary if staying in a metro city and 40% in a non-metro city.
How to claim HRA?
The employer must collect proof of rent payment to allow exemption on HRA to the employee. Thus, it is based on rent receipts and final tax liability will be calculated accordingly. Employee’s TDS shall be adjusted that they don’t have to pay tax on HRA.
Rent receipts need not be provided if per month’s rent is up to or less than. 3,000 Rs. However, if it exceeds. 3,000 Rs., then rent receipts will be needed. Landlord’s PAN Number is required while submitting HRA claims to the employer if the rent paid by the employee exceeds Rs. 1 Lakh in one financial year.
Can you get a tax rebate if you live in your own house?
No, if you live in your property and pay no rent for accommodation, then you’re not eligible to claim an HRA exemption.
If your house is under construction and you're living on rent in another property in the same city, can HRA be claimed?
Yes, it can be claimed.
Can you get HRA tax exemption and tax rebate on your home loan?
Yes, you can get HRA tax exemption and tax rebate on your home loan. If you have rented a house although having your own home, for which you are paying home loan through EMIs, you can claim for both. In such a case, you've to show proof that the house for which you are paying a home loan is far away from your workplace.
What proofs need to be submitted to claim HRA?
The list of documents that can be used as a proof to claim HRA are:
• Electricity bill
• Water bill
• Letter informing about the tenancy to the housing co-operative society
• Rent Agreement (Lease & license agreement)
Can both the working spouses claim HRA tax benefit separately?
If both are paying rent, you can claim HRA tax benefit separately.