If you go through the break-up of your CTC statement, you will find a term HRA, which stands for House Rent Allowance. It is paid to compensate the employee for the rent he is paying in the absence of a company quarter.So is “House Rent Allowance (HRA)” a taxable income for you? The answer is ‘yes’ and ‘no’ because a portion of House Rent Allowance (HRA) is tax-free for you. Then how to calculate the tax-free portion of House Rent Allowance (HRA) in your salary?
House Rent Allowance (HRA) meaning
House Rent Allowance means, if you are a salaried person and staying in a rented accommodation, then you can claim tax exemption for the rent paid. The rent can be partially or fully tax exempt.
Who can claim HRA exemption?
Self-employed and salaried people can claim HRA exemption, though under a different section of Income-tax as explained in the article.
HRA Exemption Section
House Rent Allowance (HRA) is exempted under section 10(13A) of the Income Tax Act.
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House Rent Allowance rules and regulations
Under House Rent Allowance rules and regulations, you will get exemption up to a minimum of the following 3 amounts:
- Actual House Rent Allowance (HRA) received by the employee in the year.
- Rent paid by the employee for his accommodation in excess of 10% of his salary.
- 50% of the salary, if he stays in any of the 4 metro cities of Delhi, Mumbai, Kolkata or Chennai; otherwise, 40% of the salary.
The salary for this calculation means the basic salary which includes dearness allowance if the terms of employment provide for it and commission based on a fixed percentage of turnover achieved by the employee.
Please note that if the employee is staying in his own house or not paying any rent, he will not be eligible for the above tax exemption.
HRA Calculation in Excel 2020-21
You can click on the below link and download HRA calculation in Excel for 2020-21
HRA Calculation in Excel 2019-20
House Rent Allowance (HRA) – Factors Deciding Exemption
From the above rules, it is clear that there are 4 factors which decide your eligibility for House Rent Allowance (HRA) exemption. They are:
- Actual HRA received by you
- Actual Rent paid by you
- Your city of residence
- Your salary (Basic Pay & DA)
HRA Calculation in Excel – Exemption Calculator for AY 2021-22
Let us see an example of how you can do HRA calculation in Excel. The Excel can be used as HRA exemption calculator for AY 2021-22.
Suresh is getting a Basic Pay of Rs. 50,000 per month and House Rent Allowance (HRA) of Rs. 20,000 per month. He is staying in rented premises in Chennai and is paying a monthly rent of Rs. 22,000.
How is HRA calculated?
HRA is calculated as per the 3 formulas given below:
- Actual HRA received in a year = 12 x 20,000 = 2,40,000
- Rent – 10% of the salary in a year = 12 x (22,000 – 10% of 50,000) = 2,04,000
- 50% of the salary in a year = 50% of 12 x 50,000 = 3 Lakhs
Suresh is eligible for a deduction of Rs. 2,04,000 from his actual HRA of Rs. 2,40,000. So, he needs to pay tax for the balance of Rs. 36,000 only.
House Rent Allowance (HRA) Tax Benefits – Lose without Landlord’s Pan
The Circular (08/2013) states that “…an employee claiming exemption from tax with respect to House Rent Allowance received is now required to report the PAN of the landlord to the employer, if the rent paid by the employee to the landlord exceeds Rs. 1 Lakh per annum, along with the rent receipt.”
In simple words, if the annual rent is above Rs. 1 Lakh, then the employee must report the PAN details of the landlord to the employer. If the landlord is not having a PAN,then the landlord must submit a declaration to this effect along with his name and address.
The step is to plug 2 loopholes in the system:
- To stop the abuse of House Rent Allowance (HRA) claims
- Furnish the correct rent income information by the landlord
These are the basics of House Rent Allowance exemption; In addition to the basics, now let us answer a few common questions asked by the readers…
Can you claim HRA if you own a house?
The answer to this question is both – Yes and No.
- You cannot claim house rent allowance (HRA) if you are staying in your own house.
- You can claim HRA if you are staying on rent, not in your own house.
Can you claim both HRA and Home Loan for Tax Exemption?
If you are paying the loan for your own house and staying in a rented accommodation, you can claim the tax benefits for both, HRA as well as the Loan property.
Can HRA be claimed by both the husband and wife?
Yes, HRA can be claimed by both the husband and wife if:
- Both husband and wife, are paying rent to the landlord.
- Husband and wife are giving separate receipts for the rent paid to the landlord
The husband and wife can claim HRA exemption proportionately but both can not claim the entire rent paid to landlord.
Is HRA compulsory?
No, HRA is not compulsory because it depends upon your employer to make house rent allowance as a part of your salary.
Can husband pay rent to wife and claim HRA?
Yes, the husband can pay rent to wife and claim HRA in case the wife owns the house. The same would be clubbed into the wife’s income under the head (Income from House Property) and taxed accordingly.
But if the wife is not having any income and the house has been bought by you for her, the income will be clubbed in your income and taxed accordingly.
Can I pay rent to my mother/brother/parents and claim HRA?
Yes, you can claim HRA if you are paying rent to your mother, brother or parents but they need to show the income as Income under House Property.
Is rent agreement mandatory for HRA exemption?
No. Rent agreement is not mandatory for HRA exemption but it is better to have one as your CA can demand it for lower TDS.
Is rent receipt mandatory for HRA exemption?
If you are paying rent up to Rs. 3,000, rent receipt is not mandatory for house rent allowance exemption, but for rent above Rs. 3,000, rent receipt is mandatory for HRA exemption. Also, rent above Rs. 1 lakh per annum will require a PAN card of the landlord.
What is 80GG claim deduction for HRA?
Section 80GG applies for HRA claim deduction under the following conditions:
- If your employer does not include HRA in your salary, and
- Self employed people
You can still claim deduction under 80GG.
HRA rent receipt format in India
There is no particular HRA rent receipt format in India, You can add following details in the rent receipt:
- Landlord’s Name
- Address
- Duration
- Rent amount
- PAN card number, if annual rent is more than Rs. 1 Lakh
Probably I have included all points in this article, but if I have missed any point please let me know. I would be happy to include them in the article.
Also please feel free to ask any question on house rent allowance exemptions.
I am govt employee I have my won house and I live in. But that is project area I am not taking free rent quarter. Can I claim hra
Hi Adamshafi
No, You can claim hra for exemption
I am working in Central Govt and gettting HRA in my salary. I live in the house which is my wife’s name in the same city. Can I entitled to get HRA in my salary.
Is your wife working?
I have been serving in northeast but hra is not provide by the department why
Hi Ram sasi
You need to ask this from your HR department.
Hello .. I am working in MDL. We are going to sign Chartered of Demand (COD) with MDL in coming days. The said COD will be effective from JAN-2017. Employees will get benefit from JAN 2017 till the date of signing Memorandum of Settlement (MOS) including Wage revision and various allowances.
*My query is regarding the amount of ‘Arrears of HRA’ which is going to increase w.e.f. JAN-17 – Are we liable to get Arrears of HRA w.e.f.JAN-17 till the date signing the MOS’
Please give your comments/remarks on my above query.
Hi Vikram
Thanks for your comments but I am really not sure about this.
Hi sir, pls clarify my doubt , one of my central government official is not claimed her HRA from 2014 now she is claiming, can we pay her HRA from that date or not , if not from which date I can pay to her, is any rules is there to pay HRA from back date, if yes , wat is the duration pls let me know, thank u
Hi Murugan
HRA is a part of CTC every year. Backdate, i doubt it is possible.
Im a central govt employee and was on maternity leave for six month w. e. f July 2018 to Dec. 18. After that I applied child care leave. Is there any ruling that HRA can be stopped after six month if u availed leave for more than 6 month
I am working in state Govt Educdtion Deptt and gettting HRA in my salary. I live in the house which is my wife’s name in the same city. Can I entitled to get HRA in my salary.
Hi Pradeep
Yes, you are entitled to get HRA in your salary. Whether you take tax deduction on it or not, depends on you.
I am private organization employ 30 years staying in there staff quarters is it any law to claim this house
Please consult your lawyer.
thanks for the information
Hello
Myself and my wife had taken house in joint name .My wife earlier was working and contributed her money in taking house presetly she is house wife can i show rent given to her for my tax exemption
Hello,
I need your advise on this peculiar case –
I pay Rs.14,000 as monthly rent in total – out of which Rs.12,000 goes to the house owner as rent, and Rs.2,000 goes to the Broker (who is also relative to the owner – a PoA) – he calls them as Furniture charges. He also says the rent receipt will be given for Rs.14,000 in total (while in reality only Rs.12,000 is going to the house owner)
What should I need to declare as the rent – for income tax exemption?
Please guide.
Hi Vineel
Get the pan card of the house owner. Are you transferring the entire amount to house owner or paying it separately?
You would not be able to claim Rs. 14000 if you did not get the pan card. Without pan card the limit is Rs. 1 Lakh per annum.
Sir I am employed in defence , and my wife in paramilitary force and posted at different stations, both not availing govt quater. Can we both claim HRA?
Hi Parveen
Yes , you both can claim HRA if you are at different locations.
Hi!
I inadvertently missed submitting my HR receipt to my employer for appropriate deduction in income. How do I make amends and set the same right during IT return submission
I am working in private organization in Mumbai. I am having my salary in the scale of 15600-39100 (AGP-8000). According to scale my HRA is Rs. 11000. In month of Feb 2018, I was rented a accommodation outside the employer premises. And my employer is paid me me HRA of Rs. 11000 for month of Feb 2018.
Now from March 2018, I am shifted to accommodation provided by employer. The employer dicided the rent (Rs.8000) for accommodation facility provided. The employer is not giving me HRA from march 2018 and additionally employer is asking me to pay rent for accommodation provided. So effectively rent for accommodation I am paying is Rs. 19000 [Rs. 11000 (HRA) + Rs. 8000 (Rent)]. Is it according to rules that the employee is not entitled for HRA have to pay additional amount for rent for accommodation provided?
Hi, I pay Rs.25000 to my mother as Rental for the Flat, which she owns. She gives me the rent receipts.
do I need to keep a record of how I pay the rent to her , like RTGS detials or Cheques etc
also in the FY 2018-19 can I still claim HRA if paying rent to my mother
kindly advice. Best Regards
Hi Sanjeev
Its better if you keep the records.
Yes, you can claim if the house is in your mother`s name and she will have to show it in her ITR.
Hello,
I PRIYANGKA, staying in quarters with my husband and He also doing govt.Job in another department more than 15 km far, Can he claims HRA because I am deducting HRA ,,
Hi Priyanga
Are you staying in govt quarters or on rent?
am govt employee and working in different locations.my wife living in different place in rent .she not a govt employee.am paying rent for her.shall I show the rent bill where my wife living for tax exemption.
Hi Vivekanandan
Is she working and claiming HRA?
My wife is a govt employee, stays in quarters she gets HRA which is deducted from salary as rental for quarters. Can she claim HRA exemption.
Hi, I am salaried employee, my employer pays me HRA, I stay in the quarters provided by company, but I live alone here and my wife and daughter stays in a rented house in another city in other state, so can I claim HRA tax exemption?
Please advise. Thanks in advance.
I have my own house and have rented the same. I am living in a rented house.
Rent is taxable in my account. I am a salaried person.
My question is whether I can claim HRA benefit???
Hi Abbas
Yes, you can claim HRA benefit.
IS HRA appliacble in Central Sites Like Oil & GAS company ,We have not mentioned HRA in our cost breakup of employees and our contact employers wants it to pay arrears of HRA. Please send any notification or circular or gazette on my mail ID
Hi
staying in rented government quarters can i have HRA exemption or not ?
Dear Sir,
please advice, A person working in Gurugram(HR) and having his own house in Calcutta (WB) which is borrowed by SBI and also paying house rent for another house in same city.
Can he claim both (HRA and interest on house property).
Early reply will be appreciated.
Hi Sunder,
Yes, You can claim both HRA and interest paid on House Property.
Hi sir, I am working with a company. i am getting HRA 20000 pm . My actual rent is below Rs 1 lac Per anum. For claiming HRA consuption my eployer is asking for rent agreement copy. is it necessary if i m paying 8300 pm . please advise. regards
Hi Ajay
Yes, the employer can ask for rent agreement copy.
I have received rs 77 thousands of arrears of salary of previous year in this year. This includes basic + da as arrears. Should I add this amount in 10 % of basic + da for calculation of hra exemption.?
Please reply.
hello sir, I am staying in a Government quarter. Wheather my quarter rent will be deducted from my income or it will be under 80GG. please informed me.
My wife is state govt.employ and she is residing in govt. Qtrs.of course she is not getting HRA but my self PSU employ and residing with my wife. Can I avail HRA from PSU.
Hi Suransh
Are you talking about tax exemption?
Suppose an employee lives in x city and pays rent and his parents live in y city and pays rent. Can this employee claim hra on both house rents i.e- for his own rent and his parents rent as well ?
Are both the rent agreements on your name?
Hi,
I am a defence employee. Me and my wife stay in a govt provided accommodation here at our place of work. She pays rent for a house (in different city) for her parents by transferring money every month. But the rental agreement for her parents house is in her father’s name. Can she claim this rent as part of HRA for income tax purposes? If so can you also help me out with relevant rules?
No, She can not claim.
I am working in Central Govt. organisation. i was applied for allotment the Govt accommodation in the month of April 2019. But from the concern authority (Qtr allotting officer), i have not received any allotment letter so far (jun 2019). Now i am staying outside with my family in monthly rent basis (Own expense). i requested to quarter allotment officer for issue “Non Availability Certificate” , but he is denying because at present Qtrs are vacant. Now i am not interested, to stay in Govt accommodation. The problem is after submitting the “Non Availability Certificate (NAC)” I will get HRA (Home rent allowance).
Question 1. Govt employee compulsory stay in Govt accommodation if qtrs are vacant?
2. How will draw my HRA without NAC?
Pl upload policy if any
I AM STAYING WITH MY SISTER WITH HER GOVT. COLONY… I AM A GOVT. SALARIED PERSON… HOW CAN I GET MY HRA
Can I claim HRA tax benefit if I have my own house in same city which is rented for 30000rs per month but I am staying in a bigger rented Accomodation for 50000rs per month ?
Yes, You can.
Hey. I need this information urgently. I am a research scholar receiving my fellowship through GATE in central govt. institute X. My spouse is also receiving the same in central govt. Institute Y. We are NOT CENTRAL GOVT. EMPLOYEES. If I live with my spouse in her institute married hostel, am I eligible to receive HRA? Please share any official document regarding this query.
Hi Anurag
Do you come under taxable income? If yes, how much is the taxable income?
I have occupied government accommodation at Delhi. I have transferred to N.E. region. Please clarify that whether I can draw HRA in N.E. region at same time i.e. while still in occupation of government accommodation at delhi
Hi Naresh
You can not.
I have lost the rental agreement of last year and now I want to claim HRA exemption.
Can I generate a new Rental agreement on today’s date showing the rent paid for past year and show it as a proof of HRA exemption?
Hi Gaurav
Your landlord must be having copy of agreement. Normally, rental agreement is not required untill the company asks you. I hope, you are having proof of paying the rent and not paying in cash.
Hi,
I am paying rent 19000/Month is another city and getting 13500 rent/month for my own house.
How much HRA exemption is allowed?
How to show the same in ITR 1
Hi
You ca claim HRA according your your limits as mentioned in the article. Rent received would be added to your income and taxed accordingly.
I am centre govt employe ,I am living in my own house 1 km far from my working place where the govt QTR are available can I entitled for HRA
Hi sir
I am a PSU employee, receiving HRA, leaving in rented accomodation but I have not submitted documents to my employer hence it is not reflected in Form-16. Can I still claim TAX benefit? Whether I need to submit Hard copy of ITR-1 alongwith necessary documents while filling IT returns?
Hi Jayant
You can still claim HRA in your ITR.
thanks… please guide, whether online ITR-1 (mentioning rent paid) submission is enough or I have to submit hard copy of online ITR-1 with necessary documents.
Hi Jayant
You can verify it through your netbanking or send a hard copy to their bangalore office.
Yes Jayant, you can still claim.
Is HRA is authorized to unmarried Officers residing single in government accommodation at duty station, if dependents of the Officer residing in their own house at home town?
Hi Sir,
Is it possible to claim HRA without a rental agreement?
2 are staying in an apartment, but the landlord is not ready to add 2 names in the rental agreement, so how can the second person claim HRA?
And the rent per individual is less then 1Lack per annum(8250 per head) so assume no PAN card is required.
Can you help me out?
Thanks in advance
Hi Nischit
Untill your HR department asks for it, rent agreement is not required.
This is with respect to the office.
If we have to claim TSD, how will it work?
Which TDS?
I am SBI employee my husband police department we are staying in quarters HRA is deducted in husband salary. Can I get HRA?
Sir Unable to download the sheet
I stay in mysore and my in laws stay in another city (mangaloe).I pay them 10k per month as rent , Can I claim it, my work location is mysore
I am working in different locations . My wife and daughter is living in different place with rent house. She is house wife and my daughter is studying. I am paying rent for them. Shall I show the rent receipt where my wife and daughter living for HRA tax exemption.
Hi
Yes, you can show the receipt and claim HRA. I hope, the agreement is in your name.
Sir, How to claim HRA in case for 6 months rent is Rs 12000pm (72000) and for 4 months rent is Rs 8000pm (32000),i have PAN of first landlord and Second landlord is not giving his PAN stating that rent paid to him is less than 1 lakh. Now What is Remedy in this case.
Hi Kumar
Check the rent agreement, PAN number should be mentioned there.
In this FY the salary arrear (7th pay) is credited in my account.For the purpose of HRA exemption,will I have to add this arrear in BASIC PAY+ DA for calculation of HRA exemption amount?
Hi Himanshu
yes, you have to include both.
HI
I missed to declare the HRA for 2019-2020 financial year, so the deduction has been made, is it possible to accrue the same while submitting the form 16 for returns, with all necessary documents.
Hi GK
Declare the same while filing your IT returns. You will get back the additional amount paid as tax.
hi i am a paramilitary worker i am living in govt alloted qtr but my family living in other state on rented accomadation .can i claim double HRA?I am paying rent for my parents approx 11k.
My basic salary Rs.55,000/- per month + DA in the financial year 2019-2020, I have paid Rs.20,000/- per month house rent in Delhi. Now I get what tax exemption for the year.
Hi Mam,
I’m serving in indian army as a JCOs rank. Can I claim HRA, if I living at my duty station in house those owner is my wife. Please reply and help me.
Thanks.
My HRA limit is 20000 per month. Can I use it for a total of only six months instead of 12 months (40000 per month x 6)?
I am employee of Central Govt. and availing quarter. My wife working at State Govt. and staying different place but not more than 200 km.can she claim HRA From her Department.
I am serving in central government and availing quarter. My wife serving in State government and staying in different place in a district. Can she claim HRA from her department. Please reply and help me.