My HRA is Rs. 33500.00 for metro city. My rent paid is 32000.00. If i calim HRA exemption from the employer. They will restrict the HRA to actual rent paid. 1. Will it be a good idea to claim HRA tax exemption directly from incometax deptt. while filling ITR ? 2. Where do I have to quote landlord PAN while requesting HRA tax exemption during ITR filing ? Is there any seperate form for it.
Hi,
Hope you are doing well !
First you need to know below points:
1.The entire HRA received is not always fully exempt from tax. The least of the following three will be taken to exempt from tax:
HRA received from your employer
Actual rent paid minus 10% of salary
50% of basic salary for those living in metro cities
40% of basic salary for those living in non-metro cities
The remainder of your HRA is added back to your taxable salary.
Thanks & Regards,
Payal Chhajed
Hi
1. You can only claim the eligible HRA, be it through company or directly. If you're claiming directly, you are sure to receive an intimation of mismatch of income according to Form 16 and ITR. This will require filing of all proofs of rent payments, rent agreement etc.
It is therefore advisable to get the HRA through employer only.
2. The employer is obligated to quote the PAN of the owner of the property. You are not required to do so in any of the 2 cases of HRA claim; no reporting in ITR.
There is no seperate form to.it. you can claim the same
Further, it is always better to claim HRA through company route. Because it is highly possible that you can get intimation of mismatch of claim shown under FORM 16 and Income tax return.
I would advise to go for as per company route, even you can also show your calculation as explained in above point.
2. No, you dont required to quote landlord PAN while requesting HRA tax exemption . It is already there in rent agreement. Also take the rent receipts from landlord, nowadays it is compulsory for HRA claim and make the payment through banking Channels.
Thanks & Regards,
Payal Chhajed
1.HRA exemption is based on predefined limits and calculation.Employer will also follow the same. Amount of exemption will not differ may it be directly or through company .
So It is advisable to claim HRA thorough employer .
2.No separate form for it.
HRA doesn't work that way. The exemption is available as a minimum of 1. HRA actually received 2. Rent paid in excess of 10% of your Basic Salary 3. 50% of Basic Salary. In any case, it will not exceed the HRA you have received from the employer, or even the rent actually paid by you for that matter, so no point in claiming it at a later stage.
My HRA is Rs. 33500.00 for metro city. My rent paid is 32000.00. If i claim HRA exemption from the employer. They will restrict the HRA to actual rent paid i.e. 32000.00. Will it be better to claim HRA exemption directly ? that way I can get full HRA (Rs. 33500) from employer (without rent receipt) and later claim HRA exemption on actual rent paid (Rs. 32000) while filing ITR. How long does it take to process HRA exemption claim ? Thanks
Since you're receiving HRA from the employer, the calculation for claiming HRA exemption remains the same even if you are claiming it directly.
The deduction available is the least of the following amounts:
a. Actual HRA received;
b. 50% of [basic salary + DA]
c. Actual rent paid less 10% of basic salary + DA
If you were not receiving HRA from the employer, you could have claimed deduction under section 80GG. The least of the will be considered as the deduction under this section:
a. Rs 5,000 per month;
b. 25% of adjusted total income*;
c. Actual Rent less 10% of adjusted total Income*
*Adjusted Total Income means Total Income Less long-term capital gain, short-term capital gain under section 111A and Income under section 115A or 115D and deductions 80C to 80U (except deduction under section 80GG).
Hi,
It is always advisable to claim HRA through your employer. The HRA exemptions is based on specific calculations and it is not necessary that the entire amount you receive will be exempt. If you claim it directly, you may get an intimation for mismatch of income between Form 16 and the ITR.
As far as quoting Pan number is concerned, the employer is obligated to do so.. you are not required to quote the PAN number if you claim HRA directly.
On your second question, it is not advisable to claim the entire HRA when you are not eligible to claim the full amount.
You can call me for any further clarifications.
Regards,
Nikhil.
Hi,
I won't advise for claiming HRA on personal level as you are not eligible for full amount.
Thanks & Regards,
Payal Chhajed
Hi,
1. No, its not a good idea. In fact you should not do that. It will attract unnecessary questions from IT department.
Lower of the following is allowed as HRA exemption:
a. Actual HRA received from employer
b. Actual Rent Paid (-) 10% of salary
c. 50% of Basic Salary (for Metro)
Above formula is applicable even if you take HRA from employer or IT department.
2. You will have to give it to your employer. You dont need to quote it in return of income.
Hi
If you paid rent more than you has to submit PAN of landlord to your Employer.
You can get same deduction through ITR as well as Employer, as there is same provision applicable on both of you.
There is defined formula to calculate HRA and there is no rule to defined exemption amount.
Exemption can be claim at the time of filing ITR too.
Dear Sir,
There are certain limits under which HRA needs to be calculated. Ultimately you will have to pay tax on the difference because there will be a difference between your claim and claim allowed as per law so advisable to go by law to avoid correspondence from the department.
Thanks
Its not at all advisable to claim HRA personally.