How much HRA exemption is allowed?
HRA exemption is allowed least of the below : Actual HRA received by the employee. 40 % of salary for non metro city or 50 % of salary if the rented property is in Metro cities like Mumbai,Delhi,Kolkata and Chennai) Actual rent paid less than 10% of salary.
How HRA exemption is calculated?
HRA received from your employer. Actual rent paid minus 10% of salary. 50% of basic salary for those living in metro cities. 40% of basic salary for those living in non-metro cities.
Is HRA exemption available for AY 2020 21?
Exemption limit for the assessment year 2020-21 & 2021-22 is Rs. 2, 50,000. It is advisable for the landlord to declare the rented received as income in the Income Tax return filed by him to avoid litigation.
Is HRA exempt from tax?
For most employees, House Rent Allowance (HRA) is a part of their salary structure. Although it is a part of your salary, HRA, unlike basic salary, is not fully taxable. Subject to certain conditions, a part of HRA is exempted under Section 10 (13A) of the Income-tax Act, 1961.
What is the old tax slab for 2020-21?
Tax Slab for Individuals below 60 Years of Age
|Income range per annum||New Slabs for FY 2020-21, AY 2021-22||Old Slabs, mandatory upto FY 2019-20 and optional from FY 2020-21|
|Upto ₹ 2.50 Lakh||No Tax||No tax|
|Above ₹ 2.50 Lakh to ₹ 5 Lakh||5%||5%|
|Above ₹ 5 Lakh to ₹ 7.50 Lakh||10%||20%|
|Above ₹ 7.50 Lakh to ₹ 10 Lakh||15%||20%|
Is HRA fully exempted?
Although it is a part of your salary, HRA, unlike basic salary, is not fully taxable. Subject to certain conditions, a part of HRA is exempted under Section 10 (13A) of the Income-tax Act, 1961. The amount of HRA exemption is deductible from the total income before arriving at a gross taxable income.
Can I pay rent for my parents and claim HRA?
You can pay rent to your parents if you are staying with your parents. This should be done by transferring the money (rent) to their bank account or pay via a cheque. This way you will be able to claim your HRA deduction properly. Since rent is paid to owners, the property must be owned by your parents.