Section 10( 13A) & Rule 2A House Rent Alowance Calculation

10(13A) House Rent Allowance (Sec 10(13A) & Rule2A)
Least of the Following
  1. Actual HRAS Received
  2. 40% of Salary (50% if house situated in Mumbai, Calcutta, Delhi or Madras)
  3. Rent Paid minus 10% of salary 
* Salary = Basic + DA (if part of retirement benfir) + Turnover based Commission
Note: 

  1. Fully Taxable if HRA is received by an employee who is living in his own house an employee who is living in his own house or if he does not pay any rent
  2. It is mandatory for employee to report PAN of the landlord to the employee if rent paid is more than Rs.1,00,000 (Circular No. 08/2013 dated 10th October, 2013)

FAQ’s on HRA

  1. How to calculate HRA exemption, monthly or yearly?HRA exemption calculation is depended on four variables as House rent allowance received, house rent paid, salary and location of the house. If all of these remains same in a year then you can calculate it on yearly basis otherwise for each set of variable, you have to do separate calculation. Suppose DA is changed then you have to calculate separate calculation.
  2. For HRA Exemption what is definition of salary? Is only Basic or Basic plus DA?
           It is Basic Salary and not the Basic plus DA.
  1. How Much Tax Exemption Do I get if I live in my own House?
          NIL. If you live in your own house than HRA Exemption is not for you. HRA Tax Deduction under               Section 10 (13A) is only for those who live in the rental house.

How to Calculate HRA in Income Tax

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