HRA Related Query

Que - Our one employee has submitted the HRA receipt duly signed by his wife on revenue stamp. He has also submiited the PAN of his wife & He has paid the House rent vide cheque amount i.e. Rs. 54000/- for 4 Months. Houseproperty is the name of his wife. Can employee claim the HRA exemption?

Ans - If you are a salaried person receiving house rent allowance (HRA) from your employer, you are entitled for a tax deduction under the Income Tax Act. The tax implications of the house rent allowance (HRA) seem to be a confusing factor for almost every person.

House rent allowance (HRA) is a grant given by the employer to the employee to meet the cost of renting a house. It is basically a part of the taxable salary of an individual and one receives it irrespective of the type of property he resides in. Whether one stays in the rented accommodation or resides in his own house, he will get the HRA if his employer chooses to offer the allowance.

HRA Deduction

The deductions on HRA are eligible under Section 10(13A) of the Income Tax Act and will depend on certain laws. An individual can claim an HRA exemption only if the following three conditions are satisfied:

An HRA allowance is received as part of the salary package.
If one is staying in a rented accommodation and paying rent for it.
The rent exceeds 10% of the salary.

As the property is in the name of his spouse, it would be allowed