Regarding HRA Exemption

gsharma 1
Viewed 2007

Dear Pankaj,

I am trying to use latest Income tax calculator but find one problem in HRA section. It looks like the HRA exemption is calculate only for those people whose rent is deducted from salary not for those who pay rent by them selves. I dont have much know how about ITax rules but looking on internet and other ITax calculators I feel there is the issue with this tool. It doesnt calculate the corrent HRA exemption for those who pay rent by them selves.

Please let me know if I am correct or if I am not using it properly.

With Best Regards Gaurav

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

Income tax calculator can be definitely used for individuals who pays house rent themselves. In fact there is no provision for individuals whose rent is deducted directly from salary.

We are not sure what fields gave you such impression. In order to compute HRA exemption, you would need to enter values in Basic salary(Row 9), House rent allowance in salary(Row 10), Dearness allowance, if any (Row 11), Place of residence (Row 4) and actual rent paid by you (Row 39).

Still if you face any issue, you can upload your file somewhere and send us the link. We would be happy to correct your file to make it working.

Pankaj Batra5212

Dear Pankaj,

I have uploaded my file at

https://www.yousendit.com/download/T2djbGtITWN3NUxvS3NUQw

What my problem is that after filling all the values specified by you and applying rule for HRA exemption as follows -

1- 40% of Basic 2- HRA Received 3- Rent Paid - 10% of Basic

The lowest of the above three comes out to be Rs. 138877 as per my calculation and as per my companies tax statement but the Income Tax Calculator gives this value as Rs. 125693.

I really hope I am not doing something silly or missing something.

Please suggest.

Best Regards Gaurav

gsharma•

There are changes in basic salary and HRA components in between year. HRA exemption would be computed on actual basic salary, HRA and rent paid every month. If you see in calculator in Row 40, HRA exemption is different for different months which is due to change in salary.

Pankaj Batra•

Thanks alot Pankaj,

Its really a good and important point you mentioned, I and even my company didnt notices and knew this fact.

Best Regards Gaurav

gsharma•
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