Is HRA Tax Free?

Is HRA exemption available for AY 2020 21?

Along with House Rent Allowance (HRA) benefits and Standard Deductions, other common and popular deductions removed under the new tax regime are: Exemption u/s 80C – Up to Rs 1.5 lakh.

Tax rebate u/s 87A – Up to Rs 12,500 on taxable income up to Rs 5 lakh..

How do I claim HRA exemption?

You are just required to copy the amount from the Part-B of your Form-16 and paste in the relevant section of ITR-1 form. The required information will be pasted in the ‘Salary as per section 17’ in ITR-1 form. The tax-exempt portion of HRA will be reported under the head, ‘Allowances exempt u/s 10’ in the ITR 1.

What is HRA salary?

The amount employees receive from the employer as a part of the paid salary is called HRA (House Rent Allowance). HRA offers tax benefits to the employees for the amount paid by them for accommodations every year. … You can avail this exemption only if you live in a rented accommodation.

Do I need to submit proof for HRA?

Yes, the rent receipt is a mandatory document to claim HRA. If an employee receives HRA in excess of Rs. 3000/month, it is necessary to present rent receipts to the employer for claiming HRA. … 3000/month, try to keep rent receipts with you in case the officer asks for them at a later date.

Can I pay rent for my parents and claim HRA?

1) You can pay rent to your parents and claim HRA deduction if your parents own that property. But they will have to show the rent as income from house property. But if you are staying with your parents in a rented accommodation and they are paying the rent, you can’t claim the HRA deduction.

How is HRA calculated for income tax?

For the purpose of HRA calculation for tax deduction, the least of the following three will be considered:Sum received from the employer as HRA.Actual rent paid minus 10% of salary.50% of basic salary for those residing in metro cities and 40% for those living in non-metro cities.

How much HRA is exempt from tax?

50% of the employee salary is eligible for HRA tax exemption if he or she lives in any of the Metro cities of India. The metropolitan cities of India include Delhi, Mumbai, Calcutta and Chennai. In case the employee lives in any other city then 40% of the salary can be HRA exempted.

What are the documents required for HRA exemption?

Documents Required for HRA. An individual will have to submit the rent receipts and the rent agreement to avail the benefit under the house rent allowance. If the rent paid by him exceeds 100000 annually, then he will have to submit the PAN Card details of the landlord along with the rent receipts and rent agreement.

Can claim HRA if own house?

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.

Can I claim HRA in income tax return?

Claim House Rent Allowance exemption in your income tax return: All salaried employees receive HRA from their employer. An exemption against HRA is available when the employee is living in a rented accommodation and pays rent to the landlord. … Don’t worry, HRA exemption can be claimed in your income tax return.

Is HRA included in 80c?

The popular deductions/exemptions that individuals under the new income tax regime will have to forego include LTA (Leave Travel Allowance), HRA (House Rent Allowance), interest on housing loan on self-occupied property, Standard Deduction and Chapter VIA deductions which include Section 80C, Section 80D among others .