HRA (House Rent Allowance) is an amount paid by employers to their employees as a part of their salaries. It provides tax benefits for what they pay as their rent for housing every year .The HRA is monitored through section 10(13A) of the IT Act of India. If the employee has his/her own house and does not pay any rent then he/she is not eligible for the HRA.
In case the rent paid by an employee exceeds Rs 1 lakh per financial year then the PAN details of the landlord must be submitted together with the HRA claims papers. While calculating the HRA, the dearness allowance together with any other commissions paid is added to the basic salary. In case there is no dearness allowance or commission then the HRA will be 50% or 40% of the salary.
The House Rent Allowance (HRA) it denotes the total amount given by the employer towards his employee's accommodation as rent. The HRA is valuable because it helps the employee in receiving tax deduction at the end of the financial year. Thus the HRA helps in reducing the tax one has to pay. But the HRA is applicable only to those employees who pay rent.
