If you are staying in your own house, you will not be able to claim the IT benefits on the HRA received. However, a recent ruling by Delhi Tribunal provides a way to claim the IT benefit on the HRA received. Central Government employees may find this news useful.
HRA is the house rent allowance in income tax. It means the salary component received towards the rent payment is allowed as a deduction from taxable salary under Section 10(13A).
The deduction available is the least of the following amounts:
So when you are residing in your own house, the actual rent paid will be zero. Hence no deduction in respect of IT is possible.
One way to avail of tax benefits through house rent allowance (HRA) is to transfer the house into your wife's name and enter into a rent agreement with your wife.
The Delhi Tribunal ruled in February n the case of Abhay Kumar Mittal vs. deputy commissioner of Income-Tax (I-T), that if the rent is paid to the wife and her income resources, including the rent income, are proven in the income tax return (ITR), the benefit of HRA cannot be denied to the husband. Most importantly, the decision stated that the exemption cannot be denied even if the property for which HRA is being claimed is primarily funded by the husband.
To claim the HRA, you have to retain the rent receipt. You have to submit Form 12BB, the rent agreement and the rent receipts to your employer. The rent receipt must include the tenant’s name, landlord’s name, amount of rent, date of payment, period of rent, address of the house, the signature of the landlord, PAN of the landlord and revenue stamp among other details.
To claim the HRA, the house shouldn’t be owned by the husband, rather it should be in the name of the wife only. The husband shouldn’t own any part of the house.
Notably, the income of the wife must be mentioned while claiming for the ITR even if her earnings are less than the basic exemption limit. It has to be noted that the rent paid to the wife will be treated as income for her tax calculation.
🕑 07 Jun,23 4:46p.m.
Cabinet Approves Revival Package for BSNL, focusing on 4G & 5G
🕑 07 Jun,23 1:46p.m.
Government Plans to Shut Down MTNL and Transfer Operations to BSN
🕑 06 Jun,23 9:19a.m.
Pensioners Samaj writes to FM demainding the FMA to ₹ 3000 pm
🕑 04 Jun,23 8:02a.m.
Final Chance: Submit Your APAR by 10.06.2023
🕑 02 Jun,23 10:29a.m.
DA Hike from July 2023: Will it be 3% or 4%? Find Out Now!"
🕑 31 May,23 9:56p.m.
With April CPI-IW released, 45% Dearness Allowance from July 2023
🕑 30 May,23 4:38p.m.
BPMS demand cashless treatment for serving CG staff under CGHS/CS(MA)
🕑 30 May,23 4:34p.m.
Reservation in promotions – Procedure to be followed
🕑 26 May,23 8:18p.m.
Accessible formats of courses for persons with disability on iGOT
🕑 26 May,23 8:07p.m.
Delhi High Court Protects Government Servants' Fundamental Rights
🕑 07 Jun,23 10:56a.m.
Central Government Health Scheme (CGHS): A Comprehensive Guide
🕑 13 Apr,23 3:19p.m.
Pension system revision, will it go back to the old way?.
🕑 10 Apr,23 11:58a.m.
What the government might implement under NPS?
🕑 06 Apr,23 12:10p.m.
In a major relief for the loan borrowers, RBI keeps repo rate unchanged
🕑 04 Apr,23 8:01p.m.
FAQs on Kendriya Vidyalaya class 1 admission
🕑 25 Mar,23 1:23p.m.
Committee to explore ways to guarantee pension similar to OPS
🕑 25 Mar,23 11:09a.m.
Happy times: DA hiked by 4% to 42%. Hopes for assured pension
🕑 23 Mar,23 1:34p.m.
New app for taxpayers to view TDS, interest, dividend income information
🕑 22 Mar,23 1:34p.m.
Five tax saving investment options to get tax free returns
🕑 23 Feb,23 2:10p.m.
How to get higher EPFO pension: Explained