Many people live in their own houses, yet claim HRA tax benefit by submitting a rent receipt. The government has now plugged this loophole. It has also lowered the exemption limit for reporting the rent received. \u00a0The Central Board of Direct Taxes recently issued a circular \u00a0in this regard.<\/p>\n
<\/p>\n
If you\u2019re a salaried taxpayer claiming HRAexemption, and you pay a rent of more than Rs. 1 lakh a year, you will now have to \u00a0give your landlord’s PAN. If your landlord does not have a PAN, you have to give the tax authorities the name and address of your landlord and a declaration fromthe landlord saying he or she does not have a PAN.<\/p>\n
<\/p>\n
Till now, if the total rent paid was less than Rs 15,000 a month, there was no need to submit the landlord’s PAN details. The new rule effectively reduces this limit to Rs 8,333 a month.<\/p>\n
<\/p>\n
Henceforth, be careful about the HRA receipt.\u00a0 Here\u2019s a sample calculation to determine the \u00a0HRA claim:<\/p>\n
<\/p>\n
a) \u00a0HRA amount received<\/p>\n
b) Rent paid in excess of 10 per cent of salary<\/p>\n
c) Fifty per cent of salary if you live in Mumbai\/Delhi\/Kolkata\/Chennai or 40 per cent of salary if you reside in other cities. Salary is the sum of Basic Pay and Dearness Allowance.<\/p>\n
Sample calculation:<\/p>\n
Assume you live in any one of four metros:<\/p>\n
Basic salary: 20,000<\/p>\n
DA\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 : 10,000<\/p>\n
HRA received: 10,000.<\/p>\n
Rent paid: 15,000<\/p>\n
<\/p>\n
How much is eligible for tax benefits as per the act? Whichever is the lowest.<\/p>\n
<\/p>\n
HRA : 10,000.<\/p>\n
Rent paid in excess of 10 per cent of salary: 15,000 – (10% of 30,000),<\/p>\n
or 15,000-3,000= 12,000.<\/p>\n
50 Per cent of salary(30,000) is 15,000.<\/p>\n
<\/p>\n
The least of the three figures (10,000\/12,000\/15,000) is HRA received (10,000). Hence, hence the entire HRA is exempted from tax.<\/p>\n
For clarification write to info@myassetsconsolidation.com.<\/p>\n","protected":false},"excerpt":{"rendered":"
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