House Rent AllowanceCompensation Management

Prepared By

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Manu Melwin JoyAssistant Professor

Ilahia School of Management Studies

Kerala, India.Phone – 9744551114

Mail – manu_melwinjoy@yahoo.com

House Rent Allowance• House Rent Allowance

(HRA) is an allowance given by many Indian employers, including government employers, to salaried employees in India to help them meet the cost of rent of House occupied by them on lease or rental basis.

House Rent Allowance

• HRA is exempt from tax

under Section 10(13A) of

the Income Tax Act,

subject to certain

conditions.

House Rent Allowance• House Rent Allowance

forms part of taxable salary income of an individual and an employee may be eligible to receive it, if his employer chooses to offer the allowance.

House Rent Allowance• Thus a salaried employee

may be eligible for House Rent Allowance (HRA) irrespective of Whether he/she stays in a rented/ leased accommodation or resides in his/her own house.

House Rent Allowance• As stated earlier, House

Rent Allowance received by a salaried employee is exempt from tax under Section 10(13A) of the Income Tax Act, subject to the following conditions:

House Rent Allowance– House Rent Allowance

(HRA) is part of the salary package offered by the employer to the employee

– The employee receiving HRA stays in a leased/rented accommodation and pays rent for it.

– Rent paid by the salaried employee exceeds 10% of his/her salary.

House Rent Allowance• Rent paid by a salaried

employee to his/her parents, for occupying a house owned by them, is eligible for exemption under Indian Income Tax Act.

House Rent Allowance• However rent paid by a

salaried employee to his/her spouse, for occupying a house owned by the spouse, is not eligible for exemption under Indian Income Tax Act.

House Rent Allowance

• You must have valid

rental receipts, for

having paid the rent, in

order to claim tax

exemption on House

Rent Allowance (HRA).