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.
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