What if I fail to submit rent receipts to my employer?
In this case, you can claim the HRA tax benefit when filing your income tax returns. You should keep proof of rent payments on hand because you may be required to submit these documents to the Income Tax department to validate your claim.
What tax benefits are available to someone who does not receive HRA as part of their salary but lives in rented housing?
If a person pays rent for an unfurnished or furnished house, they can claim a tax deduction on the rent paid (under Section 80 (GG) of the Income Tax Act), as long as HRA is not part of his or her salary. Form 10B should be submitted for this purpose.
What are the documents required for HRA exemption?
Rent receipts and rental agreements must be submitted to the employer in order to claim the deduction for the house rent allowance. If the rent is more than ₹1 lakh per annum, the house owner’s PAN must be submitted.
Who is not eligible for HRA exemption?
You cannot claim an HRA tax exemption if you pay rent to your spouse.
What happens if you don't claim your HRA?
If you fail to submit the HRA documents to your employer, the HRA section of your Form 16 will be taxable. If you do not have your rent documents, you can still claim HRA benefits by manually submitting the eligible HRA amount, which is tax-exempt.
Is a lease agreement required for HRA?
You must have a valid lease agreement. The rent agreement must include all relevant information, such as the amount of monthly rent, the length of the lease, any utility bills you must pay and so on.
What can you do if you live at your parents' house and want to claim HRA?
If you pay rent to your parents, your HRA may be tax-free. If the parent owns the property, a person living in her parents’ home can pay them to rent and claim an HRA exemption.
How much HRA can you claim?
The amount of HRA you can claim is determined by your salary, HRA received, annual rent paid, and location. For salaried workers, it is usually the lower HRA paid by an employer, actual rent paid for housing minus 10% of basic pay, or 40%/50% of basic pay for those living in non-metro/metro cities.
Under which Section of the Income Tax does HRA fall?
HRA deductions can be claimed under Section 10(13A) for salaried individuals and Section 80GG for self-employed or salaried individuals who do not receive HRA.