PayHR 'HRA Calculator' is useful for employees, Companies HR and Payroll Professional's to calculate HRA exemptions.The HRA calculator is designed to calculate HRA exemption in various methods, like if rent amount varies in any months along with the rent paid amount, then this will be the right choice for your
PayHR's Online HRA Calculator :
HRA is an amount that is paid to salaried individuals every month by their employer for meeting the rental expenses of their house. This amount so received is partly exempted from tax. In case the employee lives in his/her own house and does not pay any rent, then the entire amount would be considered in taxable income for computing tax.
The exemption on HRA is calculated as per 2A of Income Tax Rules. As per Rule 2A, the least of the following is exempted from salary under Section 10(13A) and does not form part of the taxable income.
1. Actual HRA received from employer
2. For those living in metro cities: 50% of (Basic salary + Dearness allowance)
For those living in non-metro cities: 40% of (Basic salary + Dearness allowance)
3. Actual rent paid minus 10% of (Basic salary + Dearness allowance)
1. As a proof, copy of rent paid receipt from landlord and rent agreement is compulsory
2. If you pay monthly rent up to Rs 3000/-, then no proof is required
3. If you pay monthly rent between Rs 3000/- to Rs 8332/-, then rent receipt is required
4. If you pay monthly rent above Rs 8332/-, then rent receipt and agreement along with Landlord name and Pan number is compulsory
5. If paying rent over and above Rs 50000/- per month, Form 26QC is mandatory to provide as tax deducting proof.
6. Submit proof to your employer every year by March. The proof should be for the period from April to March calendar. If you exit from the company, then remember to submit before employer process FnF settlement
A person can claim HRA exemption by paying rent to their parents every month. It is advisable to have a proper rent agreement and receipts. There should be valid money transferred of rent amount to a parents bank account every month. Also, the parents need to show rental income in their income tax return.
Employee can claim upto Rs 60,000/- deduction under Section 80GG as maximum.
Yes, Individuals can claim both benefits together. A person is eligible to claim HRA exemption if he stays in rented accommodation. Simultaneously, if a person has taken a home loan from a financial institution then he can claim housing loan principal and interest benefits too. If he had bought a house with the help of a home loan and is living in another house on rent, then he can claim tax benefit for both. But if the house he bought and the house he lives is in the same city, then he should have a genuine reason for not living in the house that he owns, to prove to Income Tax Officer. The reason could be that the house he owns is too far from his workplace, or the commute is very difficult.
Yes, they can claim HRA exemption partially. To get this benefit the rent receipt and agreement should have both names. In rent agreement the amount of rent paid by both parties should be included.
This happens when the employee missed submitting rent proof to the employer, or the employee had not provided sufficient proof to the employer. In such a scenario employee can include the HRA exemption amount in his personal Income tax filing with the help of the PayHR HRA calculator.