ITR filing: How to claim HRA in tax return : 26-07-2019

House rent allowance (HRA) is one of the most commonly received allowances by the salaried class. If you are paying rent for accommodation to a landlord which can mean your parents also, then you are eligible to claim tax exemption for the rent paid. 

In a departure from the previous year, this year ITR-1 is in sync with the Form-16 received by salaried persons from employers as a TDS certificate. Therefore, it is easier to claim the HRA exemption as you are required to copy the details from the Form-16 and paste it in ITR-1. 

If you have forgotten to submit the documents such as rent agreement or rent receipts to your employer, then worry not, as you can still claim the tax-exemption benefit available on HRA while filing your income tax return (ITR). 

However, remember in such a case you will be required to manually calculate the amount of HRA received by you which is exempted from tax. 

Abhishek Soni, CEO, Tax2win.in, an ITR-filing website says, “As you have not submitted the HRA documents to your employer, your Form-16 will show the HRA portion of your salary as fully taxable. This will mean that the taxable amount of your salary as shown in Form-16 will be higher than the calculations made by you.” 

How to claim tax exemption on HRA?
(i) If rent agreement or rent receipts submitted to employer

If you have submitted rental agreement or rent receipts to your employer, then in such a case, the tax-exempt portion of HRA received by you can be seen in Form-16. It is possible that either the entire HRA received by you during the FY 2018-19 is exempt from tax or only part of it is exempted, depending on which of the conditions/criteria set down for claiming HRA exemption you meet. 

Remember while submitting rent agreement or rent receipts to your employer, you are also required to submit PAN of your landlord if the annual rent exceeds Rs 1 lakh. 

“The taxable portion of HRA will be added to your salary as per provisions in section 17(1) under the head ‘Gross Salary’. On the other hand, the tax-exempt portion of HRA will be shown separately under the head Allowances to the extent exempt under section 10”, adds Soni. 

If you are filing your tax return using ITR-1 on the e-filing website, then amount of HRA exempted from tax, if any, is likely to be pre-filled. It is advisable that individuals verify the pre-filled information with the available documents i.e. as mentioned in Part-B of Form-16. 

In case these details are not pre-filled or you wish to file your ITR using the Excel utility, then in such a case, these details are to be reported as follows: 

a) Taxable portion of HRA
As said above, the taxable portion of HRA is already added under the head, ‘Salary as per provisions in section 17(1)’. You are just required to copy the amount from the Part-B of your Form-16 and paste in the relevant section of ITR-1 form. 

a) Taxable portion of HRA
As said above, the taxable portion of HRA is already added under the head, ‘Salary as per provisions in section 17(1)’. You are just required to copy the amount from the Part-B of your Form-16 and paste in the relevant section of ITR-1 form. 

b) Tax-exempt portion of HRA
The tax-exempt portion of HRA can be reported under the head, ‘Allowances exempt u/s 10′ in the ITR1. From the drop down menu, select ’10(13) – Allowance to meet expenditure incurred on house rent’. 

You are required to copy the tax-exempt portion of HRA from Part-B of Form-16 from the ‘Allowances exempt under section 10’ and paste it in the relevant box in the ITR. 

You are required to copy the tax-exempt portion of HRA from Part-B of Form-16 from the ‘Allowances exempt under section 10’ and paste it in the relevant box in the ITR. 

Source : Financial Express