Q. Hi! I live in a rented accommodation. However, I forgot to submit the rent receipts to my employer during the proof submission period. I am eligible for A House Rent Allowance. Can I still claim HRA while filing my income tax return? Please guide what all I need to keep in mind. Jayesh Gupta
A. House Rent Allowance (HRA) is the allowance that the employer gives to its employees to manage their rent. To give you this benefit, the HRA is provided as a part of your salary. HRA can help you claim deductions subject to certain conditions. Section 10 (13A) of the I-T Act allows you to claim tax deductions for the HRA received. The lowest amongst the following three is exempted from tax and the remaining amount is clubbed with your taxable salary.
- HRA given by the employer
- Actual rent paid minus 10% of basic salary (Including DA and eligible commission)
- 50% of basic salary if the employee lives in a metro or 40% of basic salary for employees in the non-metro areas.
If you live in rented accommodation and HRA is a part of your salary, you can claim deductions for the same by furnishing the rent receipts during the time of proof submissions. This brings us to your first question. Although rent receipts are important to claim an HRA deduction, you can still claim them without submitting your proofs.
The proof submission deadlines vary from company to company and ends by March 31 for all the companies.
Even if you forgot to submit your rent receipts, you can still claim HRA while filing your income tax returns. You just need to calculate the HRA that is be exempted as per the rules using an HRA calculator available on various personal finance aggregator’s website. Reduce that amount from the taxable income. In case of an excess tax, file a claim for refund.
You just need to have your rent receipts and PAN of your landlord in case the rent paid in the year exceeded Rs. 1 lakh.
Pointers You Need to Keep In Mind
– If you live with your parents, you can still claim HRA if it is part of your salary component and you pay rent to your parents. Your parents should be legal owners of the property and they should declare the income in their tax returns. – You can claim HRA benefit if you live in rented accommodation in a city but own property in another city.
– You can still claim HRA if your own and rented property are in the same city but you have a genuine reason for not staying in your self-occupied house.
– You can claim tax benefits for your home loan and HRA together if you are living in a rented apartment and servicing a home loan.
Have a question on personal finance? Ping me on Twitter at @adhilshetty with the hashtag #AskAdhil. The writer is CEO, BankBazaar.com, an online marketplace for loans and credit cards. Need help in calculating your EMI? Use BankBazaar’s easy home loan EMI calculator.