ITR Filing 2025: Usually, HRA is included in the salary. This is the money that the company (employer) gives you for the payment of house rent. Therefore, it is exempted because it is considered that you have used this money for the payment of house rent. But, there are some conditions to claim HRA.
ITR Filing 2025: House Rent Allowance (HRA) helps a lot in saving tax. If your salary includes the component of HRA, then you can claim exemption under section 10(13A) of the Income Tax Act. It sounds very easy when you read it. But, it is not that easy. The Income Tax Department can reject your claim for a small mistake in claiming HRA. It is important to keep in mind that you can claim HRA only if you use the old regime of income tax. Claiming HRA is not allowed in the new regime.
Meaning of House Rent Allowance
Usually HRA is included in the salary. This is the money that the company (employer) gives you for the payment of house rent. Therefore, exemption is available on it, because it is believed that you have used this money for house rent payment. But, there are some conditions to claim HRA. First, it is necessary to be a salaried taxpayer. Second, you must live in a rented house. Third, you must pay rent. Fourth, you must have proof of paying rent. Income Tax Department asks you for rent agreement and rent receipt.
How much HRA can be claimed
The question is how much HRA can a taxpayer claim? There is a formula for this. First, how much HRA do you get from the employer. Second, if you live in a metro city, then 50% of the salary (basic plus DA) and if you live in a non-metro city, then 40% of the salary (basic plus DA). Third, the actual rent paid minus 10% of the salary (basic plus DA). Out of these three, you can claim HRA on the amount which is the lowest.
Claim can be rejected due to these mistakes
If you give a fake rent receipt, then your HRA claim can be rejected. If you give a rent receipt of a higher amount, then also your claim will be rejected. Income tax rules allow claiming HRA on the rent paid to parents. But, you must have proof of this rent payment. This means that if you pay house rent to your father, then this income should be included in the father’s income tax return.
Rent payment and proof of living in a rented house
To claim HRA, it is necessary to have a rent agreement. After that, you should also have the receipt of rent payment during the relevant financial year. Finally, you should also have the PAN of the landlord. Salaried taxpayers are required to send the information of these things to the finance department of the employer by the first or second week of January every year. If you do not send this proof to the finance department, then your HRA claim may be rejected.
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