Back What is House Rent Allowance?
A working individual's salary generally comprises multiple components such as basic pay, allowances for different purposes such as accommodation, travel and health, and forced savings options like gratuity and provident fund. Understanding salary structure is essential not just for financial reasons but also to help with filing taxes. One such component of salary is house rent allowance, usually abbreviated as HRA. This calculator allows you to know how much of your HRA is taxable and how much is exempted from tax.
Frequently Asked Questions
There are many portals and services online that will calculate the amount of your HRA tax exemption for you. Online HRA calculators in India are quick and easy ways to compute this tax deduction component. HRA calculators online will ask you to input your salary details and compute your HRA for you. This way, you can avoid mistakes in the HRA formula.
Since a self-employed individual does not get a wage, there is no HRA and no need to discuss an exemption from the HRA.
However, there is a different provision in the Income Tax Act that addresses this issue and allows a person who is not receiving HRA but is paying rent for his home to claim a deduction under section 80GG.
This is indeed feasible. You can be renting a property in one location while owning and paying down a mortgage on a home in a different city.
- Rent paid can be claimed as a tax deduction on HRA.
- The interest paid on your mortgage can also be deducted from your taxes.
- Home loan principal payments is also eligible for a tax deduction.