Owing a home is a dream of every salary earning individual. It takes a lot of time and efforts to fulfill this dream. The best part of owning a home is not to pay the rent. This the financial benefit and there are many other social benefits too. It sucks when you pay the rent. But then there is a concept of House Rent Allowance (HRA) which comes to our rescue. HRA is an important ingredient of salary. Not only it compensates the rent paid, but also helps in claiming tax exemptions.  So let us discuss the calculation of House rent allowance exemption.

On March 02, 2018 by www.taxexcel.net

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Download All in One Income Tax Preparation Excel Based Software for Govt & Non-Govt employees for the Financial Year 2015-16 & Ass Year 2016-17 [ This Excel Based Software can prepare at a time your Income Tax Computed Sheet + Automated HRA Exemption Calculation + Automated Arrears Relief Calculation with Form 10E + Automated Form 16 Part A&B and Form 16 Part B as per the Budget 2015] This Excel Utility can Use both of Govt and Private Concerned employees.

Most of the Tax payers are known about the Income Tax Section 80C where you can relief Max Rs. 1.5 Lakh. And Common Tax Payers only follow this section 80C, and they always follow whether the limit extended or not, which deduction are include in this Section 80C. Most of the Tax Payers are look this Only this Section.

But As per the Income Tax Act 1961, you may get Income Tax Relief from your Source of Income Directly other than Section 80C. Below given a list of Income Tax Section were you can get Relief and this deduction will be reduce your Income Tax. The below given list is shown and follow the New Finance Budget 2015-16.  Budget 2015 has been introduced in Parliament. The Finance Minister has kept the Personal Income Tax rates unchanged for the Financial Year 2015 /2016 (Assessment Year 2016-2017).

Section 80CCD:- Employee can contribute to Government notified Pension Schemes (like National Pension Scheme – NPS). The contributions can be upto 10% of the salary (or) Gross Income and Rs 50,000 additional tax benefit u/s 80CCD (1b) is proposed in Budget 2015. In FY 2014-2015, the maximum tax exemption allowed under Section 80CCD is Rs 1 Lakh only. In Financial Year 2015-2016 or Assessment Year (2016-2017), this will be Rs 1.5 Lakh (u/s 80 CCD 1 ) and additional exemption of Rs 50,000 u/s 80CCD (1b) will be allowed. ( To claim this deduction, the employee has to contribute to Govt recognized Pension schemes like NPS)

(10% of salary is applicable for salaried individuals and Gross income is applicable for non-slaried. The definition of Salary is only ‘Dearness Allowance.’ If your employer also contributes to Pension Scheme, the whole contribution amount (10% of salary) can be claimed as tax deduction under Section 80CCD (2). The ceiling limit of 1.5 Lakh u/s 80CCD is not applicable on employer’s contribution.)

Section 80D Medical Insurance :-Deduction u/s 80D on health insurance premium will be Rs 25,000, increased from Rs 15000. For Senior Citizens it has been increased to Rs 30,000 from the existing Rs 20,000. For very senior citizen above the age of 80 years who are not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure.

Section 80DD :-You can claim up to Rs 75,000 (increased from the existing Rs 50,000) for spending on medical treatments of your dependents (spouse, parents, kids or siblings) who have 40% disability. It is also been proposed to increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability.

Section 80DDB :- An individual (less than 60 years of age) can claim upto Rs 40,000 for the treatment of specified critical ailments. This can also be claimed on behalf of the dependents. The tax deduction limit under this section for Senior Citizens is proposed as Rs 60,000 and for very Senior Citizens (above 80 years) the limit is Rs 80,000

Section 24 (B):- House Building Loan Interest:- You can claim upto Rs 2 Lakh as tax deduction on the home loan interest payment. If your property is a let-out one then the entire interest amount can be claimed as tax deduction.

Section 80EE:- House Building Loan Interest :- You can get another Relief from the House Building Loan Interest U/s 80EE which was introduce in the Financial Year 2013-14 and this Section remain continue for forth comming financial Year. The Max Limit Rs. 1 Lakh and the this relief can get who are HB Interest Paid since 1/4/2013 and onwards.

Section 80U :- You can claim up to Rs 75,000 (increased from the existing Rs 50,000) who have 800% disability. It is also increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability above 80 %

       Section 80 TTA :- This Section can get relief from Income Tax from the Savings Bank Interest             Max Rs.10,000/- who's taxable Income less than 5 lakh.

     Section 87A :- This Section can get Relief from Income Tax as Tax Rebate Max. Rs.2,000/- who's         Taxable Income Less than 5 Lakh.

     Section 10(13A) : House Rent Exemption  Max Rs. 50%,40% or 10% of Basic pay +                  D.A. + Spl allowances which ever is less [ Download HRA Exemption Calculator U/s 10(13A)

   Section 89(1) :- Arrears Relief from Income Tax, some of employees have received the             salary amount from his Previous Financial Year, which may break up and can get relief this       section and also he have to submit the Form 10e.[ Download the Arrears Relief Exemption       Calculator U/s 89(1) with Form 10E, Since 2000-01 to 2014-15 ]

On November 09, 2015 by www.taxexcel.net

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Owing a home is a dream of every salary earning individual. It takes a lot of time and efforts to fulfill this dream. The best part of owning a home is not to pay the rent. This the financial benefit and there are many other social benefits too. It sucks when you pay the rent. But then there is a concept of House Rent Allowance (HRA) which comes to our rescue. HRA is an important ingredient of salary. Not only it compensates the rent paid, but also helps in claiming tax exemptions.  So let us discuss the calculation of House rent allowance exemption.

Many of the salaried class taxpayers remain confused relating to the taxability of HRA received by them. HRA is an allowance a sum of money regularly paid to meet expenditure relating to rent.

1) DOWNLOAD THE AUTOMATIC HOUSE RENT EXEMPTIONCALCULATOR  IN EXCEL

HRA Exemption Calculator Snapshot

2)   DOWNLOAD THE ARREARS RELIEF CALCULATOR U/S89(1) WITH FORM 10 E SINCE F.Y.2000-01 TO F.Y.2015-16

Arrears Relief Calculator Snapshot

Annexure -1 of Arrears Relief Calculator

EXEMPTION OF HRA UNDER SECTION 10(13A) & Rule 2A

Condition

Under Section 10(13A), the condition to claim HRA Exemption is that the person who is in receipt of HRA, does not live in his own house, and pays rent in excess of 10% of his salary for his residential accommodation.

No Entitlement for Exemption:

• When an employee stays in his house
• When an employee does not pay any rent or incur any expenditure towards rent.
• When the rent paid is less than 10% of salary

Points to be Considered:

• The exemption shall be calculated on the basis of where the accommodation is situated
• If Place of employment is the same for the whole year, then HRA Exemption shall be computed for the whole year. If there is change I place of employment is the same for the whole year, then HRA exemption shall be computed for the whole year. If there is change in place of employment during the previous year, then HRA exemption shall be calculated on monthly basis.
• Exemption should be calculated in respect of the period during which rental accommodation is occupied by the employee during the previous year.

HOW TO CLAIM HRA EXEMPTION

As per income Tax Act, 1961 the employer need to deduct the TDS on salary of employee. He calls for all deduction/exemption proof from the employee. As an employee you need to provide the House rent receipts duly signed & Stamped to your employer. Generally every employer collects the HRA receipts at the end of the year. 

As per the Circular 17/2014 issued by CBDT for deduction of TDS on salary, it has been decided that as an administrative measure that salaried employees drawing HRA upto Rs. 3000/- p.m will be exempted from production of rent receipt. However this concession is only for the purpose of TDS, a income tax officer may call for rent receipt below Rs. 3000/-.

Further if annual rent paid by the employee exceeds Rs 1,00,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer. In case the landlord does not have a PAN, a declaration to this effect from the landlord along with the name and address of the landlord should be filed by the employee.

On October 12, 2015 by www.taxexcel.net

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