If you are living with your friends, colleagues or others in a shared flat, you can avail HRA benefit in proportion of rent that you are paying. HRA could be claimed in your Income-tax return only if you have submitted rent receipts to your employer. Hence you need to make sure that you are issued a separate rent receipt by your landlord for amount paid by you.
How is HRA exemption calculated?
The HRA exemption is the minimum of the following 3 amounts–
- HRA received (if you have stayed in rented accommodation for part of the year, consider HRA for only that part).
- 50% of your (Basic Salary + Dearness Allowance) when you live in a rented place in Mumbai, Calcutta, Delhi or Chennai OR if you are in any other city 40% of your (Basic Salary + Dearness Allowance)
- Rent paid (proportion of rent paid by you) less 10% of (Basic Salary + Dearness Allowance)
So, HRA exemption for shared flat is calculated in the same way as normal HRA the only difference is, here you can claim HRA exemption on your share of rent paid! Click here to know more about HRA.
Please Note :
- In order to claim HRA exemption in Form 16, you need to submit rent receipts to your employer. Also, you are required to have a proper rent agreement , which can be submitted to your employer if asked by him. In case you failed to claim HRA exemption from your employer, you can still calculate HRA exemption at the time of filing. Please Note, your Income Tax Officer may ask for relevant documents in such case.
- You need to provide PAN of landlord as well, if your annual rent exceeds Rs. 1,00,000.
- You can generate rent receipts from our myITreturn App. Click here to download the myITreturn app.