Case 1 : In case client receives any HRA from employer but did not claim benefit of exempt HRA in Form 16 , then he can claim benefit of the same while filing Income Tax return by computing the exemption amount as follows :-
As per the Indian Income Tax Act, the HRA exemption should be calculated as the least of the following.
1. Rent paid in excess of 10% of Salary. 2. Actual HRA received by the employee.
3. Forty percent of salary, if the location of the residence is in a non-metro city/town or 50% of salary, if the location of the residence is in a metro city(i.e Mumbai, Delhi, Kolkata, Chennai)
Note : Salary for computing HRA means Basic Salary plus Dearness Allowance.
Case 2 : In case client is not receiving House Rent Allowance(HRA) from employer then Client can claim deduction for amount of Rent paid for his accommodation U/s 80GG, if following conditions are fulfilled.
1) Client is self employed person or client is an employee but he does not get house Rent Allowance from the employer at any time during the {Current Financial Year}.
2) Filer or his/her spouse or minor child of {filer} should not own any residential accommodation at the place where the {filer} resides, performs the duties of his office, or employment or carries on his business or profession-
3) In case filer owns residential accommodation at a place other than the place in Pt.2 above, then filer should not declare such House Property to be self occupied.(it means filer should not claim NAV from House Property to be “Nil”)
As per Income Tax Act, Maximum Deduction under section 80GG is least of :
1. Rs 5,000/- per Month,
2. 25% of Total Income,
3. The Excess of actual rent paid over 10% of Total Income..
Note : Total Income for this purpose means total Income Minus Income from Capital Gains minus deductions U/s Chapter VI-A.
Comments
2 comments
But ia m not able to add my rent paid.Also it is not automatically calculating the deductions amount
I'm having the same problem. Are we supposed to enter the deduction under the Salary section as "Allowances exempt"? When entering the rent paid over 10% of salary, it is not showing any difference in the tax calculation.
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