Every Salaried Employee (Taxpayee) remits HRA u/s. 10(13A) and claim exemption during Annual Income Tax Return. In respect of Exemption of House Rent Allowance is regulated u/s. 10 (13A) read with Rule 2A of Income Tax Rules, 1962.
How to exempt from Tax U/s. 10(13A)?
How to exempt from Tax U/s. 10(13A)?
- An amount equal to 50% of salary, where the residential house is situated at Bombay, Calcutta, Delhi or Madras and an amount equal to 40% of salary where residential house is situated at any other place;
- House rent allowance received by the employee in respect of the period during which the rental accommodation is occupied by the employee during the previous year; or
- The excess of rent paid over 10% of salary.
Following points need to be taken in to consideration while calculating the amount of HRA admissible as exemption u/s 10(13A):
“Salary” for the purpose of computation of exemptions u/s 10(13A) means Basic Salary and includes Dearness Allowance if terms of employment so provide. It also includes commission based on a fixed percentage of turnover achieved by an employee as per the terms of contract of employment AND EXCLUDES ALL OTHER ALLOWANCE & PERQUISITE.
Exemption is not available where an employee lives in his own house, or in a house for which he doesn’t pay any rent.
“Salary” for the purpose of computation of exemptions u/s 10(13A) means Basic Salary and includes Dearness Allowance if terms of employment so provide. It also includes commission based on a fixed percentage of turnover achieved by an employee as per the terms of contract of employment AND EXCLUDES ALL OTHER ALLOWANCE & PERQUISITE.
Exemption is not available where an employee lives in his own house, or in a house for which he doesn’t pay any rent.
