HRA exemption is qualified solely for house rent payment not for other amenities like eatables and other facilities. In the case of “Paying Guest”, you pay consolidated rent including other amenities. You must separate the portion of house rent only. You will enter only house rent payment excluding other facilities for calculation of house rent allowance exemption or taxable part.
For Example: If A pay Rs. 3000 P.M. as the paying guest including all the facilities like breakfast, dinner, etc. then A will separate the cost of that amenities. A will treat rs. 2000 as a rent and Rs. 1000 for other amenities. Now, A will calculate the HRA exemption by using only rs.2000, which is his rent portion.
Let’s find out the relevance part of income tax act for paying guest house rent allowance exemption.
Meaning: House Rent Allowance (HRA) is given by the employer to the employee to meet the expenses in connection with rent of the accommodation. HRA is exempt under section 10(13A) to the extent of the minimum of the following three amounts.
- Actual House Rent Allowance received by the employee
- Excees of rent paid for the accommodation occupied by him over 10 % of the salary.
- 50% of salary where the residential house is situated at Mumbai, Calcutta, Delhi or Chennai and 40% of the salary where the house is situated at any other place.
For claiming HRA exemption, you should fall under following situation.
- House Rent Allowance Received
- House Rent Paid
So, the above conditions are satisfied in the case of paying guest also. So why you can not consider the exemption of HRA. However, you have to follow some rules and condition to get an exemption of HRA.
Read: For more clarification and calculation of HRA exemption
Related posts:
- Calculation of House Rent Allowance (HRA) Exemption
- Claim Exemption on Salary Components
- Etaxindia Invites Guest Writers for Revenue Sharing Program
- Deduction on House Rent under section 80GG
- Most Popular Exempt Allowances for Salaried Persons
Sponsored Links