Now, let us understand how much tax deduction he can claim on the basis of this allowance. A, who lives in a rented house, works as a salaried employee in Delhi. NOTE: Salary refers to the sum of basic salary, dearness allowance (DA) and any other commissions, if applicable for the purpose of HRA calculation.

50% of salary when residential house is situated in Mumbai, Delhi, Chennai or Kolkata 40% of salary when residential house is situated elsewhere.Actual rent paid minus 10% of the basic salary, or.The amount of tax deduction that can be claimed over HRA is the least of the following: How is House Rent Allowance (HRA) Calculated? You should be actually paying house rent, i.e., the rent receipts should be issued in your name.You should receive HRA as a salary component.

Who Can Claim Tax Deduction on HRA – Eligibility CriteriaĪ part of HRA can be claimed as a tax deduction according to Section 10(13A) of the Income Tax Act, if the following eligibility criteria are met: Let us understand the eligibility criteria to claim HRA deduction and its calculation in the following sections. HRA not only helps you manage the expenses incurred on a rented house, but also helps you save on your total tax outgo. It refers to the amount paid by an employer to his/her employee to meet the cost of living in a rented accommodation. The full form of HRA is House Rent Allowance, which often forms a key taxable component of a salary slip.

Section 80GG – How to Save Tax If You Don’t Receive HRA?.

Important Points to Remember for Claiming HRA Deduction.

How is Tax Deduction on House Rent Allowance (HRA) Calculated?.

Monthly salary slip format in excel