Can you demand HRA for rent paid at your native place?
In this article, 3 bhk flat on rent in kharghar we discuss how you can assert HRA in case you have relocated to your native place and during COVID-19 pandemic
A great number of workers in India are operating from home because of the COVID-19 pandemic. Looking at the uncertainty involved, 3 bhk flat in kharghar for rent many employers had granted their workers permission to work from home until December 2020, in June 2020 itself. As a result, many workers who were living in rented places returned to their native lands. A large number of these workers are earning the House Rent Allowance (HRA) and are worried as to whether they will be able to demand HRA for the rent paid at their native location, away from their place of work. Some of the companies’ HR departments have already told their employees that HRA’s argument about the rent paid in a location other than theirs employment, shall not be entertained. In this article, we discuss whether these companies’ HR department’s argument is right and how you can claim HRA, should your company not approve your claim.
What are the requirements needed to claim HRA?
Let us first understand the legislative requirements on employee allowance for HRA. Section 10(13A) of the Income Tax Act provides that, 3 bhk flat in kharghar for rent upon fulfillment of certain conditions, a salaried individual may seek tax benefits relating to HRA obtained from his employer. The section contains no restriction as to where the employee may claim the HRA exemption, as long as the employee occupies the residential accommodation and the other conditions are met. Furthermore, the legislation states that the profit of HRA can only be sought if the employee has already paid the rent and the residential accommodation for which the rent is payable, is not owned by the employee.
And you are entitled to claim HRA ‘s value, 3 bhk flat rent on kharghar as long as both conditions are met. Please note that in case the house is jointly owned by you, you will not be entitled to assert HRA benefit. And if you have a residential house with your parents , siblings or spouse that you own jointly, you are not entitled to this advantage. Similarly, if you have signed a tax planning agreement, you would not be entitled to demand HRA to lease your own property to your landlord, who, in effect, has paid you the rent.
In addition, 3 bhk flat for rent in kharghar near station the law has no requirement that the rent should be paid to the same landlord all year round. The employee may change his housing facilities as many times as he needs to and claim HRA rent benefit paid to various landlords during the year, given that the HRA claim was not made more than once for the same duration.
With the aid of an equivalent case, this can be explained and understanded betterIn this world of internet and technologies, 3 bhk flat in kharghar for rent it is also possible that the employee and the employer may be located geographically at various locations within the country or even in different countries. Suppose a software engineer is employed by a corporation based in the US, HRA being a part of his salary. Thus, even during normal times and given the fact that the employer and employee are located in two different countries, Indian law will still allow the Indian employee to claim the HRA gain, as long as he fulfills the basic requirements of having paid the rent for the residential accommodation that he occupies and that he does not own.
It is obvious from the above discussion of the legal provisions that the argument of these companies’ HR department is completely false and is not in line with the legal provisions.
How much can you say about HRA?
Rule 2A of the Income Tax Rules 1962 stipulates the limits you can claim HRA benefits to. 3 bhk rent in kharghar the cap is therefore the smallest of the following amounts:
- Real amount of HRA earned.
- Rent rate paid in excess of 10 per cent of your income.
- 50% of your salary if you are living in four metro cities or 40% of your salary.
For HRA claim purposes only the regular wage and the dearness allowance shall be included in the wages. 3 bhk flats rent in kharghar the estimation of the excluded allowance for the time during which the accommodation is occupied must be made, and the HRA benefit can not be made for the entire year on an aggregate basis. And, essentially, the calculation has to be performed on a monthly basis, to arrive at the exemption component of HRA for the respective months. From the above rules it becomes obvious that you are not entitled to claim HRA exemption, if the rent charged does not exceed 10 percent of the salary. In addition, you would not be eligible to claim the HRA benefit for the time you did not pay any rent for.
What documents are needed in order to assert HRA?
In general, 3 bhk flat on rent in kharghar sector 20 in addition to the rent receipts, the employers insist on sending a properly signed and executed rent agreement to qualify for HRA claims. However, a lot of the workers may not be able to conduct a stamped signed rent agreement due to the Coronavirus pandemic. It should be noted that the legislation does not allow a valid license and leave agreement to assert the benefits of HRA to be in effect. The law gives the employer a obligation to obtain adequate evidence before it grants you HRA ‘s benefit. And, even though you provide copies of the rent receipts, accompanied by a bank statement evidencing rent payment, the landlord will regard it as being fully compliant. Sending an offer just makes the transaction look genuiner.
The law does not mandate that you pay the rent through a banking channel. 3 bhk flat on rent in kharghar sector 35 the rent can also be paid out in cash as long as the transaction is real and the receiver has included the rental income in his income tax return. However, it is best to pay the rent via banking channels, in order to prevent any complications. The law also does not allow you to pay monthly rent, but it is advisable to do so in order to avoid raising doubt in the tax authorities’ minds.
What if the company deducts tax only after lease receipts have been submitted?
There could be a case where the HR department either does not completely understand the legal criteria for accepting the HRA benefits, 3 bhk on rent in Kharghar without brokerage or is strict and extra cautious, disallowing the HRA claim and deducting tax on the full amount of HRA paid And in such a situation not everything is lost. You will also assert HRA exemption when you file your income tax return and demand a refund for your employer’s excess tax deducted. In such a case, retain all the documentary evidence relating to the payment of the rent, such as the receipt of rent, bank statement and any other documentary evidence in support of you living at a specific place of rent, such as courier or post obtained at the rental address.
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