HRA exemption

M M Shah 1
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Hi,

I am from Mumbai and my family stays in rented apartment in Mumbai for which I am paying rent of Rs. 25,000/- PM.

Now in Sept 2011, I got permanently transferred to Hydrabad and I will be working in Hydrabad, and I will be paying rent of Rs. 10,000/- PM. In Hydrabad, however my family will continue to stay in Mumbai, for which I will be paying rent of Rs. 25,000/- PM in Mumbai as well.

I am getting Basic pay of Rs. 40,000/- and HRA of Rs. 20,000/- PM

My query is to get maximum benefit of permissible HRA as per Income Tax act, can I claim my Mumbai Rent (for my dependent family) of Rs. 25,000/- PM even though I am working in Hydrabad ?

or

I.Tax Act allows me to claim only HRA of Hydrabad where I will be working, ( Rent of Rs. 10,000/- i.e. only eligible to get Rs. 6,000/- PM as HRA exemption)?

( Please note I am also awailing housing loan benefits for Self Occupied property in Pune )

Kindly advice, Thank You, M M Shah

hra-exemption house-rent-allowance income-tax
1 Answers

Officially house rent allowance exemption would be available only for house taken on rent in the city where your work (or which is at a commutable distance from office).

Your employer may not stop you if you show rent receipts of Mumbai home, but it may create issue in case income tax department raises a query.

You may still keep getting benefit of home loan interest in side as that property is not in the city where you work.

Pankaj Batra5212
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