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  • Category: Tax Planning

    How can I avail tax benefit of home rent paid by me?


    Have a query about tax benefit accrued due to home rent if one takes benefits of interest and principal amount? Looking out for information regarding income tax returns? Here, our ISC experts shall respond to your query.

    I am living in a rented house in Surat. I am paying EMI of my home at Ahmedabad. I am taking the benefits of interest and principal of home loan in my income tax return. Can I get the benefits of rent paid by me every month? Is there any provision of such a thing in the income tax return?
  • Answers

    5 Answers found.
  • If you are getting HRA from your employer then you can get exemption against HRA limited to the minimum out of the following three things -
    1. Actual HRA received by you.
    2. 50% of salary if living in metro cities, or 40% for non-metro cities.
    3. Excess of rent paid annually over 10% of annual salary.

    If you are not getting HRA from your employer then you can avail deduction against rent paid under section 80GG which entitles you to a maximum rebate of Rs 5000 per month irrespective of whatever rent you are paying. So, in a year you can claim Rs 60000 as deduction.

    Knowledge is power.

  • Hello,
    Please submit your interest paid under LOHP and also add mention if your owned house is empty or let out. If you are paying rent in another city you can claim HRA. You have to give undertaking why you are submitting HRA even if you owned home. All templates of this undertaking either your employer will give or you can download online. Declare your HRA. Submit proofs like rent receipt, agreement copy and you can get tax benefit. Submitting HRA and proofs vary company to company so check with employer for more details.

    Avi
    Life Is Beautiful

  • You are having your own house and it is given for rent. You are paying the loan. You are staying in a different place and paying HRA. In such a case you can avail of HRA benefit and also you can avail of Home loan interest benefit also. You have to show the rent you are getting on your home at Ahmedabad as income.

    If there is No HRA from your employer whatever rent you are paying up to a maximum of Rs.5000/- under 80GG.

    If you are getting HRA you can claim exemption as per the IT law.
    1. Actual HRA received by you.
    2. 50% of salary if living in metro cities, or 40% for non-metro cities.
    3. Excess of rent paid annually over 10% of annual salary.

    It is better to consult a tax consultant and get the calculation done so that you need not pay more tax than required.

    drrao
    always confident

  • Yes, there is the provision of availing both getting concession for HRA for the house where you are putting yourself and the tax benifits for the loan and interest already taken for the house purchased at Ahmedabad.
    If you are enjoying HRA from your employer, you need to claim as per the provision of income - tax. The following points while commuting tax should be considered-
    1) Total HRA component received by you in a financial year.
    2) You are entitled to get accommodation allowance depending upon metro or otherwise. For metro cities, you are to enjoy 50 % of your basic as an allowance and for non metro, the same is 40%.
    3) Excess of rent paid annually over 10 % of annual salary.
    If there is no provision for paying HRA from employer side, you may avail the tax benefits as shown below- Tax - concession for the maximum Rs 5000/- as 80 GG.
    While calculating your income for a financial year, receipt of rent from the rented house would treated as your income and computation would be done accordingly.

  • As you have mentioned that you are paying an EMI for your home in Ahmedabad and taking the benefits of the principles of the home loan along with interest in your income tax return, yet you can get the benefits of rent paid at Surat in your income tax return. You can either use HRA or Under Section 80(GG) of the income tax.

    i) Under House Rent Allowance (HRA): For many salaried employees, HRA is a part of the salary structure and under Section 10 (13A) of the Income-tax Act, 1961, a person living in a rented house can claim for full or partial avail tax benefit. These facility is available to the salaried person only. The tax deduction can be done by the following method i.e. the least of the three will be followed.
    a) The actual HRA received every month or in a year.
    b) If you are living in non-metro cities, then 40% of your salary received which includes your basic salary + Dearness Allowance (DA) and if you are living in metro cities, then 50% of your basic salary + Dearness Allowance (DA).
    c) The actual rent paid by you minus 10% of your basic salary + Dearness Allowance (DA)
    Note: For claiming tax benefits under House Rent Allowance (HRA), one needs to provide their rent agreement or rent receipts. If the rent paid by you is more than Rs 1,00,000 annually, you need to provide the Pan Card of your landlord or provide a declaration under circular No. 8/2013 dated 10 October 2013 of the income tax department.

    ii) Under Section 80 (GG): For non-salaried persons or for employees who might not have House Rent Allowance (HRA) in their salary slip, they can avail tax benefits under section 80 (GG) of the Income-tax Act. The tax deduction can be done by the following method i.e. the least of the three will be followed.
    a) Rs. 5000/- per month.
    b) Actual Rent minus 10% of the (adjusted) total Income.
    c) 25% of the (adjusted) total Income.
    Note: The (adjusted) total Income refers to Total Income in a year minus the long-term capital gains and the short-term capital under section 111A, 115A or 115D and deductions 80C to 80U but except Section 80GG.

    “The most important thing in life is to learn how to give out love, and to let it come in." — Morrie Schwartz


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