v Section 80 GG- Deduction for Rent Expenditure
The deduction allowed under Section 80GG for expenditure towards the rent paid is the least of the following:
1. INR 2,000 per month
2. Rent paid minus 10% of the total income
3. 25% of the total income earned by the taxpayer
The income of the taxpayer is the amount of total revenue received for a period.
Additionally, rent paid towards finished or semi-finished accommodation is also eligible for the claim under Section 80GG of the Income Tax.
v Section 10(13A)-Exemption for House Rent Allowance
According to Section 10(13A), the house rent allowance is exempt when you meet the minimum of the following amounts:
1. Actual rent allowance received for the relevant period1
2. Rent paid for accommodation that is in excess by 10% of the salary for the corresponding period
3. 50% of the salary for a residential house in metropolitan cities such as Mumbai, Kolkata, Delhi, and Chennai and 40% of the salary for accommodation in other locations for the relevant period
Q. Can the rent can be paid to parents and HRA can be claimed for that amount?
Ø You can pay rent to your parents and claim HRA deduction if your parents own that property.
Ø But they will have to show the rent as income from house property.
Q. Can the rent can be paid to spouse and HRA can be claimed for that amount?
Ø You can't pay rent to your spouse and claim HRA deduction.
Q. If an assesse is residing in city A on rented premises where he is working and also he is paying rent for his parents in city B then whether he can get both the deduction?
Ø The assesse can opt for only one HRA deduction. But in this case he has the option to choose the higher of the rent paid as deduction.
Q. In which situation an assesse can avail loan deduction as well as HRA?
Ø Assesse can claim both HRA and home loan deduction of Rs. 1.5 lakh against principal repayment and
Ø Rs. 2 lakh against interest paid,
if assesse are staying in a different city due to job posting.
Q. Whether an assesse whose salary does not form part of HRA can claim an HRA deduction?
Ø Under Section 80GG an assesse can get the deduction of HRA. This Section is applicable for those who don't receive HRA as part of their salary and self-employed individuals.
Ø Assesse can claim HRA under this Section by filling up a Form 10BA.
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