GAME: If you work in a company, then the salary you get includes HRA (House Rent Allowance). However, this part is included in the salary of all the salaried persons. Salaried persons who get HRA and are living in a rented house, they can reduce their tax liability through this. If you do not live in a rented house, then you will have to pay tax on it considering HRA as part of the income. However, on the contrary, even if a person does not get HRA, he can still reduce his tax liability.
In case of non-availability of HRA, a person can claim deduction under section 80GG under certain circumstances. It should be noted here that if you are opting for a new tax regime from the financial year 2020-21 (Assessment Year 2021-22), then the benefit of tax exemption on HRA will not be available.
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This is how you get the benefit of deduction if HRA is not available
- According to tax expert Balwant Jain, if you are living in a rented house but your company does not give HRA, then you can claim tax deduction under section 80GG.
- Jain says that the benefit of tax deduction under this section will be available only if you have not received HRA during the entire financial year and you or your spouse or any of your minor children or HUF (Hindu Undivided Family) where you live. ) should not own any residential property.
- You will not be able to claim tax deduction under this section even if you have a residential property in your name at a place other than the place of your current occupation.
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You can claim this much on house rent
- According to Jain, in the event of non-receipt of HRA from the company, you can pay Rs 5000 per month under section 80GG, 25 per cent of the total taxable income or the actual rent less than 10 per cent of the salary; Whichever is less, you can claim the amount.
- If the company is paying you HRA, then the amount of HRA, including DA, is 50 per cent (for metro cities) or 40 per cent (for non-metro cities) of the basic salary and the actual rent less than 10 per cent of the salary; Whichever is less, you can claim the claim on that amount.