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Claiming House Rent Allowance Benefits in Income Tax Returns

So, you have been working in a company, for more than a year now. But, you have never come across the term HRA benefits. As a result, you don't know how to claim it. Before knowing about claiming your HRA benefits, let us know about it. HRA is an allowance that can be claimed by salaried individuals who stay in rented apartments or homes. However, if you are staying at your own place then HRA won't be applicable.

Now that you know about HRA, let us know about claiming it.

How to Claim House Rent Allowance

Most of the companies make provisions for HRA on your salary structures. But, sometimes these structures are not enough, in such cases, you will have to claim your HRA benefits on your own. You can do the following things to claim your HRA benefits:

   1. Fill the Income Declaration Form

This declaration is given by every employee to the employer in the first month of the year to consider and compute the applicable income tax and recover from his/her salary for 12 months. In this form, you need to mention the rent expenses of the current financial year. This includes the details of the landlord, as given below:

  • Rent paid to the landlord.

  • Name of the landlord.

  • Address of the landlord.

  • If the total rent in a year exceeds the number of 1 lakh, then you will also have to provide the Permanent Account Number (PAN) of your landlord.

  

    2.  Collect Rent Receipts and Rental Agreement

This should come as without any surprise. Since you will be asking for HRA benefits, hence collecting rent receipts from landlord would be a wise thing to do. A proper rent receipt should have the following information:

  • Date.

  • Name of the tenant.

  • Name of the Landlord.

  • PAN of the Landlord (if annual rent is more than Rs 1 lakh).

  • Address of Accommodation.

  • Duration for which you are paying.

  • Signature of the landlord on rent receipt.

With rent receipts, it's always advisable to have an agreement and collect the copy of the same.

    3.  Claim the HRA Benefit

Mostly your employer will calculate the HRA benefit on the basis of your rent details provided in the declaration, but in any case, if your employer misses to give you such benefit you can also claim such benefit while filing ITR.

    4.  Option to HRA

If you are not a salaried employee or your salary structure is not having HRA content as a part of your salary, you can use the benefit of section 80GG of the Income Tax Act, where you can avail the benefit of rent paid for his residence up to 60,000/-  as deductions under this section.

Claiming HRA was pretty simple, wasn't it? In case you are looking for help regarding claiming of HRA benefits in Bangalore, then you can get in touch with us.