How to save tax on House Rent Allowance
House rent allowance or HRA, is paid by employers to employees for the accommodation every year. Under Section 10 (13A) of the Income-tax Act, 1961 employees can get tax exemption on house rent allowance. The employees can get tax exemptions on the house rent allowance only if they are salaried professionals, and their salary structure includes HRA. Also, they must not own the house and live in a rented house to get the tax exemption. These are the following factors on which HRA is calculated: i) Actual HRA received ii) 50% of salary if living in metro cities, or 40% for non-metro cities iii) Excess of rent paid annually over 10% of annual salary Some exceptional scenarios where you can get HRA exemptions under HRA exemption rule: 1. Paying rent to the parents 2. Paying rent in another city 3. Individuals who are not getting HRA You may not receive any exclusions on your HRA in the following circumstances. 1. If your spouse/ minor child/member of Hindu Undi