ITR Exemption: Excellent news for workers! HRA will provide tax exemption up to Rs 1 lakh; examine the details right away.

 ITR Exemption: Excellent news for workers! HRA will provide tax exemption up to Rs 1 lakh; examine the details right away.

Income Tax Return- By the way, there are numerous investment options that can help you reduce your tax burden. HRA is another one among them. You can benefit from this if you are a salaried employee. But let us point you that you can only use HRA under the previous tax regime if you want to save money on taxes. Let's look at the news below to comprehend the full computation.

How much of your HRA may you claim on your ITR?

The Income Tax Return (ITR) forms for the financial year 2022–2023 have been made available by the Government of India (ITR Forms for FY 2023–2024). Notably, these forms were made available in the first week of April of last year. You can reduce your income tax using a variety of investments.

The Home Rent Allowance is one of them (HRA). You can benefit from this if you are a salaried employee. Let us inform you that you can only use HRA under the previous tax structure in order to save on taxes. The new tax structure won't permit this.

benefit in this situation


HRA, or house rent allowance, is included in taxable income on a wage. according to Section 10(13A) of the Income Tax Act, exempt from income tax. Consider a few factors to determine how much tax can be avoided by HRA.

HRA, or house rent allowance, is included in taxable income on a wage. according to Section 10(13A) of the Income Tax Act, exempt from income tax. Consider a few factors to determine how much tax can be avoided by HRA.

You are eligible for a tax exemption on HRA if the required minimum is satisfied. In this case, you should check the pay first to determine how much HRA is included. In metro areas, HRA is 50% of the base pay; in non-metro areas, it is 40%. The balance that remains after subtracting the annual dwelling rent and 10% of the annual wage is the third requirement.


Here's how you can cut costs.

An illustration can help you comprehend how much money you can save with HRA. A person who lives in a rented home and works in Delhi. Every month, his rent increases to Rs. 15,000. He receives a maximum of Rs 1 lakh in HRA from his employer each year.

His basic pay is Rs. 25,000, and he receives a Rs. 2,000 dearness allowance. A salaried person can save a maximum of Rs. 1 lakh in this way.

These records are required.

You must first have a rent agreement in order to qualify for exemption through house rent allowance. The lease should include details on the monthly rent, the agreed-upon length, and the costs. Please use stamp paper with a Rs. 100 or Rs. 200 price. On the other hand, it is also required to obtain the landlord's PAN card if the annual rent exceeds one lakh rupees.

Also, you ought to have the receipt for the rent payment. Let us inform you that you must complete Form 1 for ITR filing if your annual income is up to Rs 50 lakh. Individuals with incomes over 50 lakhs must complete ITR Form 2.