subject: What is House for Rent Bangalore simply i.e. (HRA)? [print this page] What is House for Rent Bangalore simply i.eWhat is House for Rent Bangalore simply i.e. (HRA)?
House for Rent Bangalore
Most of the salaried people get an allowance for taking care of the rent that they pay for their home. This is called House for Rent Bangalore Allowance, or HRA.
HRA gets special treatment in income tax laws, and is exempt from income tax to a certain extent. Here are the rules explained in simple terms.
If you are like most other salaried people, one of the components of your pay would be House for Rent Bangalore Allowance, or HRA. This is an allowance paid to the employee to defray the housing rent expense.
Since housing is one of the fundamental needs for us, the government treats it sympathetically, and gives us various tax breaks towards it.
Thus, you get income tax benefit when you take a home loan to buy a house. (Please read "Income Tax (IT) Benefits of a Home Loan / Housing Loan / Mortgage" for more details on this).
Similarly, there are income tax benefits on the House Rent Allowance (HRA) as well. The tax benefit on HRA is available under section 10 (13A) of the IT Act.
How much Income Tax (IT) exemption is available
The minimum of the following three is available as exemption from your income:
1. The actual HRA received from your employer
2. The actual rent paid by you for the house, minus 10% of your salary (this includes basic + dearness allowance, if any)
3. 50% of your basic salary (if you live in a metro) or 40% of your basic salary (if you live in a non-metro)
