Uncategorized

Income Tax Saving Tips: Use HRA to save tax, thus helps in tax deduction

Income Tax Saving Tips by HRA: Every salaried person has to pay a part of his salary to the government in the form of tax. Many people get House Rent Allowance every month which is a part of their salary. Looking at the salary slip, it will be known that many times this house rent allowance is included in your salary only. This is the taxable part of your salary. But, through this HRA you can also save tax. Every salaried person can avail tax exemption on HRA.

Income tax exemption available on HRA
The condition of taking HRA is that the person is living in a rented house. But, people who have their own residential house cannot take advantage of this exemption. Explain that under section 10(13A) of Income Tax, Income Tax Rebate is available on HRA. If you also want to save your tax, then know that Income Tax Calculation can be done by deducting HRA from total income.

How to calculate HRA tax exemption
First of all, calculate how much of the salary is part of HRA.
If you live in metro cities like Delhi, Mumbai, Kolkata, then 50 percent of the basic salary and if you live in non-metro, then 40 percent of the salary is HRA.

read this also: BOI e Auction: Bank of India is giving you a chance to buy affordable property! View full details here

HRA exemption calculation
Suppose a person lives in Delhi and pays a rent of Rs 15,000 per month. His basic salary is Rs 25,000 and DA is Rs 2,000. If he is getting Rs 1 lakh as HRA from the company every year, then he can save Rs 1 lakh on salary from tax.

read this also: Bank Account: What to do with the bank account after someone’s death? turn it on or off

To take advantage of HRA, you must have these documents
To avail HRA, you must have a valid rent agreement, which should mention the rent to be paid every month, the time frame of the agreement and expenses on your part. The house agreement must be signed by the landlord and you. It should be on a stamp paper of Rs 100 or Rs 200. Along with this, if you have more than one lakh rent a year, you will have to give PAN of the landlord.

,

Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.

Leave a Reply

Your email address will not be published.

Back to top button