Do you get HRA as part your salary? If yes, then it’s critical for you to understand how the HRA exemption amount is calculated? How to calculate HRA? And various other things related to housing rent allowance.
Showing posts with label How to calculate House Rent Calculation U/s 10(13A). Show all posts
Showing posts with label How to calculate House Rent Calculation U/s 10(13A). Show all posts
Thursday, 31 August 2017
Thursday, 26 November 2015
If you are a salaried employee and staying in a rented accommodation, you can claim the house rent allowance (HRA) exemption under Section 10(13A) of the Income Tax Act, 1961.
The HRA exemption is available for least of the following
amounts: a) Actual HRA amount received from the employer; b) the amount of rent
you pay for your house in excess of 10% of your basic pay; c) fifty per cent of
the basic salary, if you reside in a metro city, and 40% of the basic pay for
non-metro cities.
Download the Automatic House Rent Exemption Calculator U/s 10(13A)
For claiming the exemption, the
employee must stay in a rented house during the period for which the exemption
is being claimed and must have actually incurred the expenditure on payment of
rent. For computing the HRA exemption, salary means ‘basic salary’, dearness
allowance, if the terms of employment so provide, and commission based on a
fixed percentage of turnover achieved by the employee. While one can pay rent
to parents to claim the HRA exemption, they need to pay tax on the rent
received.
The employee will have to submit
rent receipt/rent agreement to the employer for availing the HRA exemption. The
employer needs to only obtain a rent receipt/rent agreement from the employee;
however, the employer is not required to verify the receipt for granting the
exemption to the employees.
If the amount of rent claimed is more than Rs. 1,00,000 per
year, the Permanent Account Number (PAN) of landlord has to disclosed. If the
landlord does not have a PAN, the employee is required to submit a declaration
to this effect from the landlord along with the name and address of the
landlord.
Moreover, under the Income Tax
Act, an employee can claim the HRA exemption even if he owns a house but stays
in a rented accommodation. This will be possible in cases where the employee
owns a house in some other city and cannot stay in the house because of job
location. Also, if an employee has taken a loan from a bank or a housing
finance company to buy the house, he can avail the deduction of interest under
Section 24 of the Income Tax Act as well as repayment of principal towards loan
under Section 80C of the Act, even if one is claiming the HRA exemption while
staying in a rented accommodation in another city.
The rent receipt should have a
one rupee revenue stamp with the signature of the person who has received the
rent and other details such as the rented residence address, rent paid, name of
the person who has paid the rent. While HRA is a major tool to save tax, it is
equally important to keep every documentation properly, in case demanded by the
tax authority.
Earning Curve:
* Self-employed professionals
cannot claim the HRA exemption under Section 10(13A) of the I-T Act, 1961, as
they do not earn a salary
* For claiming the HRA exemption, the employee must stay in a rented house during the period for which the exemption is being claimed
* While one can pay rent to parents to claim the HRA exemption, they need to pay tax on the rent received
* The employee will have to submit the rent receipt/rent agreement to the employer for availing the HRA exemption
* For claiming the HRA exemption, the employee must stay in a rented house during the period for which the exemption is being claimed
* While one can pay rent to parents to claim the HRA exemption, they need to pay tax on the rent received
* The employee will have to submit the rent receipt/rent agreement to the employer for availing the HRA exemption
Thursday, 18 June 2015
Click here to Download Automatic HRA Calculator in Excel
The exemption of House Rent Allowance is computed as the following manners U/s 10(13A)
- The actual amount of HRA received by the employee from his/her employer
- 50% of the Salary for individuals residing in Metro Cities (Delhi,Mumbai,Chennai or Kolkata)
- and 40% other Cities.
- Rent paid in excess of 10% of Salary (Basic Pay + D.A.)[Grade pay also include in case of Govt employee]
For an Example :-
For Kolkata City - [Metro City]
- Basic Pay Rs. 3,00,000/- P.A.
- D.A. Received Rs. 60,000/- P.A.
- House Rent Received Rs. 2,40,000/- P.A.
- House Rent Paid by the employee Rs. 1,20,000/- P.A.
- Hence the Calculation will be as follows :-
- The Actual H.R.A. Received Rs. 2,40,,000/-
- 50% of the salary [Basic Pay + D.A.] = 1,80,000/- [ For Metro City]
- Excess of rent paid over 10% of salary Rs. 1,20,000 -( 10% of Rs.3,60,000[B.pay + D.A.] =Rs. 84,000
Here is the HRA exemption will be entitled Rs. 1,20,000 -36,000 = 84000/- Relief
And Rs. 1,56,000 will be Chargeable to Income Tax.
Click here to Download Automatic HRA Calculator in Excel
Sunday, 17 May 2015
Click here to Download the Automated HRA Exemption Calculator ( Updated)
Snapshot of Excel Based HRA Calculator :-
If you are a salaried taxpayer claiming HRA(house rent allowance) deduction, watch out. The central government has lowered the exemption limit for reporting the rent received. Salaried taxpayers claiming HRA exemption and paying a rent of over Rs 1 lakh per year have to give landlord’s PAN (permanent account number). 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 lowers the rent limit from Rs 15,000 a month to Rs 8,333 per month for claiming HRA exemption without making any disclosures.
If you are a salaried taxpayer claiming HRA(house rent allowance) deduction, watch out. The central government has lowered the exemption limit for reporting the rent received. Salaried taxpayers claiming HRA exemption and paying a rent of over Rs 1 lakh per year have to give landlord’s PAN (permanent account number). 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 lowers the rent limit from Rs 15,000 a month to Rs 8,333 per month for claiming HRA exemption without making any disclosures.
"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," the Central Board of Direct Taxes said in its latest circular.
"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," it said.
Though incurring actual expenditure on payment
of rent is a pre-requisite for claiming deduction under section 10(13A) of the
I-Tax Act, it has been decided as an administrative measure that salaried
employees drawing HRA up to Rs 3,000 per month will be exempted from production
of rent receipt.
The new rule is aimed at people claiming HRA
exemption for living in their own house. "It has to be noted that only the
expenditure actually incurred on payment of rent in respect of residential
accommodation occupied by the assessee subject to the limits laid down in Rule
2A, qualifies for exemption from income-tax," CBDT said in its circular.
Thus, HRA granted to an employee who is residing
in a house/flat owned by him is not exempt from income-tax. "The
disbursing authorities should satisfy themselves in this regard by insisting on
production of evidence of actual payment of rent before excluding the house
rent allowance or any portion thereof from the total income of the
employee," CBDT said.
Click here to Download the Automated HRA Exemption Calculator ( Updated)
Saturday, 7 February 2015
Click here to download the Automated Form 16 Part B for FY 2014-15[ This Excel Utility can prepare One by One Form 16 Part B for FY 2014-15]
Click here to download the Master of Form 16 Part B for FY 2014-15 [This Excel Utility can prepare at a time 50 employees Form 16 Part B for FY 2014-15]
Most of the employees who are middle class of salaried person, thought about the Income Tax Rebate Rs. 2.000/- U/s 87A will be Continuing or not for the Financial Year 2014-15 ?. Yes this Section have also in this new Financial Year 2014-15 and can get the Tax benefits by this section also. Not only this Rebate but also the Income Tax Slab has raised from 2,00,000/- to 2,50,000/- for the below 60 years aged salaried persons and the Section 80 C has also Raised from 1,00,000/- to 1,50,000/-, it is the great news to the all of tax payers.
Now it is necessary to calculate your tax liability which will be paid in this financial year 2014-15 and Assessment Year 2015-16. Already various Web Site published new Income Tax Calculator for the Financial Year 2014-15 after just passing the Finance Budget, but they are not complete Tax Calculator or Income Tax Preparation Utility in Excel.
Click here to download the Automated Form 16 Part B for FY 2014-15[ This Excel Utility can prepare One by One Form 16 Part B for FY 2014-15]
Click here to download the Master of Form 16 Part B for FY 2014-15 [This Excel Utility can prepare at a time 50 employees Form 16 Part B for FY 2014-15]
Saturday, 15 November 2014
One tax exemption almost everybody can avail is on House Rent Allowance (HRA)
Click here to Download Automated HRA Calculator U/s 10(13A)
To calculate HRA exemption, use the least of the following amounts:
- Actual house Rent allowance received
- Rent paid in excess of 10% of salary
- 50% or 40% of salary (50% in case of Delhi, Mumbai, Kolkata & Chennai, 40% for other cities)
Salary for this purpose means :
basic salary + Dearness allowance + commission based on percentage (in any)
Here is an example of calculating HRA exemption :-
Basic Salary – Rs. 8,000 p.m.
Dearness allowance – Rs. 2,000p.m.
HRA received (actual) – Rs. 4,000p.m.
Actual rent paid – Rs. 5,000p.m
Dearness allowance – Rs. 2,000p.m.
HRA received (actual) – Rs. 4,000p.m.
Actual rent paid – Rs. 5,000p.m
Adding it up for a year we get :-
Actual amount of HRA received (Rs.4,000*12) = Rs. 48,000
Rent paid in excess of 10% of salary (Rs. 5.000 * 12 – 10% of 10,000 * 12) = Rs. 48,000
50% of Rs. 1,20,000 = Rs.60,000
Rent paid in excess of 10% of salary (Rs. 5.000 * 12 – 10% of 10,000 * 12) = Rs. 48,000
50% of Rs. 1,20,000 = Rs.60,000
The least amount here is Rs. 48,000, so all of Rs. 48,000 is exempt from Income Tax.
* salary includes basic salary + dearness allowance
* Assuming that Delhi is the city for the purpose of this calculation
* Assuming that Delhi is the city for the purpose of this calculation
Click here to Download Automated HRA Calculator U/s 10(13A)
Monday, 28 July 2014
Click here to Download the Automated HRA Exemption Calculator ( Updated)
If you are a salaried taxpayer claiming HRA(house rent allowance) deduction, watch out. The central government has lowered the exemption limit for reporting the rent received. Salaried taxpayers claiming HRA exemption and paying a rent of over Rs 1 lakh per year have to give landlord’s PAN (permanent account number). 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 lowers the rent limit from Rs 15,000 a month to Rs 8,333 per month for claiming HRA exemption without making any disclosures.
"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," the Central Board of Direct Taxes said in its latest circular. "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," it said.
Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A) of the I-Tax Act, it has been decided as an administrative measure that salaried employees drawing HRA up to Rs 3,000 per month will be exempted from production of rent receipt.
The new rule is aimed at people claiming HRA exemption for living in their own house. "It has to be noted that only the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee subject to the limits laid down in Rule 2A, qualifies for exemption from income-tax," CBDT said in its circular.
Thus, HRA granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax. "The disbursing authorities should satisfy themselves in this regard by insisting on production of evidence of actual payment of rent before excluding the house rent allowance or any portion thereof from the total income of the employee," CBDT said.
Click here to Download the Automated HRA Exemption Calculator ( Updated)
Source from www.itaxsoftware.net
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