But, it is not that easy. The Income Tax Department can reject your claim for a small mistake in claiming HRA. It is important to keep in mind that you can claim HRA only if you use the old regime of income tax. Claiming HRA is not allowed in the new regime.

Usually, salary includes HRA. This is the money that the company (employer) gives you for the payment of house rent. Therefore, it is exempted because it is considered that you have used this money for the payment of house rent. But, there are some conditions to claim HRA. First, it is necessary to be a salaried taxpayer. Second, you must live in a rented house. Third, you must pay the rent. Fourth, you must have proof of paying the rent. The Income Tax Department asks you for the rent agreement and rent receipt.

Read More Articles:-

• ELI scheme: Govt will implement ELI scheme from August 1, these people will get 15000 rupees

• Employees’ salary will increase by 34% in the 8th Pay Commission! Check salary structure

• IMD Alert: There will be heavy rain in these states including Punjab-Haryana in the next 24 hours

• School Closed: All schools will remain closed for 10 days, holiday announced from July 14 to July 23, District Magistrate’s order issued

• PAN 2.0: New PAN card with QR code will be sent to your email, know how to apply online

The question is how much HRA can a taxpayer claim? There is a formula for this. First, how much HRA do you get from the employer. Second, if you live in a metro city, then 50% of the salary (basic plus DA) and if you live in a non-metro city, then 40% of the salary (basic plus DA). Third, the actual rent paid minus 10% of the salary (basic plus DA). Out of these three, whichever amount is the lowest, you can claim HRA on that amount.

If you give a fake rent receipt, your HRA claim may be rejected. Even if you give a rent receipt of a higher amount, your claim will be rejected. Income tax rules allow claiming HRA on rent paid to parents. But, you must have proof of this rent payment. This means that if you pay house rent to your father, then this income should be included in the father’s income tax return.

To claim HRA, it is necessary to have a rent agreement. After that, you should also have the receipt of rent payment during the relevant financial year. Finally, you should also have the PAN of the landlord. Salaried taxpayers are required to send the information of these things to the finance department of the employer by the first or second week of January every year. If you do not send this proof to the finance department, then your HRA claim may be rejected.

Most Read Articles:-

Income Tax itself has told how to check ITR Refund Status, here is the step-by-step process

8th Pay Commission: Good news! Salary may increase up to 54% in the 8th Pay Commission, new update on fitment factor

The post ITR Filing 2025: Your HRA Tax Exemption Claim Might Be Rejected Under These Circumstances first appeared on Rightsofemployees.com.

This decision was approved in the cabinet meeting led by Chief Minister Dr. Mohan Yadav and then there was a wave of happiness among the employees.

Whose salary increased by how much?

There has been a huge increase in the salaries of government employees and workers. See the new structure

How much will it affect the government?

Now when the salary will increase, it will also affect the government’s treasury. Minister Kailash Vijayvargiya said that this increase in allowances will put a burden of Rs 1500 crore on the state government every year. But the government will take full care of its employees. Head of the State Ashok Pandey of Madhya Pradesh Karmachari Manch also praised this decision. He says that this will provide relief to lakhs of government employees and laborers.

Big gift from the government in the new year

The MP government has taken this big decision to bring a smile on the faces of the employees. In this era of rising inflation, a good salary and more allowance is no less than a bonus. Now the question is what will be the next gift? What other facilities can the government provide to the employees? Will DA increase or will there be changes in the promotion policy? This will also be seen in the coming time. So for now, this news is no less than a rainbow for government employees.

Related Articles:-

Aadhaar card Rule: It is necessary to update this thing in Aadhar card, check immediately

New Toll Charges: NHAI hikes toll charges on highways and expressways across country, here is the list

Train Cancelled Today: Railways has cancelled many trains on this route, check list

The post 7th Pay Commission: Big relief to government employees, 10% increase in HRA first appeared on Rightsofemployees.com.

At the beginning of the year, on March 7, the Union Cabinet had approved increasing the Dearness Allowance (DA) by 4 percent to 50 percent of the basic salary. 1 crore central employees and pensioners of the country have got the direct benefit of the 4 percent DA hike of the government. These new rates have come into effect from January 1, 2024. Apart from dearness allowance, House Rent Allowance (HRA) was also increased for the employees.

Central employees are demanding 8th pay commission

DA has reached 50 percent of the basic salary. Many unions of central government employees are demanding the government to introduce the 8th Pay Commission after DA reached 50 percent. Many central government bodies including railway unions have started demanding the formation of the 8th Pay Commission. According to reports, the 8th Pay Commission is likely to be implemented from January 2026.

Also Read: School closed: All schools will remain closed for the next five days (June 12 to 16). Check details

Employee unions wrote a letter to the government

In a letter to the Ministry of Personnel, Public Grievances and Pensions (Do&PT), the Indian Railway Technical Supervisors Association has urged the government to constitute the 8th Pay Commission and remove all existing anomalies to minimise future anomalies. The Department of Personnel and Training (Do&PT) has forwarded the letter to the Expenditure Department of the Finance Ministry for further action. The Expenditure Department is responsible for implementing the recommendations of the Pay Commission.

7th Pay Commission came in the year 2014

The current 7th Pay Commission was constituted in 2014 and its recommendations were implemented in 2016. Since then, the Central Government has increased the salary of its employees by about 23 percent. Usually a Central Pay Commission is constituted every 10 years. However, this is not legally mandatory. The Pay Commission examines, reviews, develops and recommends changes in the salaries, allowances and other facilities and benefits of Central Government employees and pensioners. The first Pay Commission was implemented in 1946.

There is a formula to calculate DA

DA is given to government employees, while DR is given to pensioners. DA and DR are increased twice a year. DA and DR hikes are decided based on the percentage increase in the 12-month average of the All India CPI-IW. Although the central government revises allowances on January 1 and July 1 every year, the decision is usually announced in March and September or October. In 2006, the central government revised the formula for calculating DA and DR for central government employees and pensioners.

The post New salary structure: How much will the salaries of employees increase after the arrival of 8th Pay Commission? first appeared on Rightsofemployees.com.

If you work, you definitely get House Rent Allowance (HRA). This is an important part of the salary. This helps in saving tax. However, for this it is necessary to pay rent. But, how can you avail the benefit of House Rent Allowance without living on rent? How can it be claimed? To understand this, the entire process has to be understood.

How to get the benefit of HRA?

House Rent Allowance is a major part of the salary. It plays an important role in saving tax. However, there is a limit regarding House Rent Allowance (HRA) and there are some important conditions as well. Tax benefit is available on HRA under Section 10 (13A) of the Income Tax Act. HRA comes under the purview of tax exemption. Before calculating Gross Taxable Income, this part is subtracted from your total income.

This is also how you get the benefit of HRA

Self-employed people do not get this benefit. Even if you live in your home, you cannot take advantage of this. To avail the benefit of HRA, it is necessary that you live in a rented house. Suppose you work in Delhi-NCR and have to commute from your home to office, then will you get the benefit of HRA? This is an important question.

You can avail benefits without living on rent

If you do not live on rent but live with your parents or a relative and have to commute to office from there, you can still avail the benefit of HRA. According to tax experts, if the house is in the name of any of your relatives like parents, then you can avail tax exemption on it. For tax exemption, parents will have to pay rent. For this, rent agreement and rent receipt will be required.

However, the total amount of rent will have to be shown as the income of the parents. If he comes under the tax net, then the rent amount will be added to his total income and he will have to pay tax on it. If they do not have any income then this will also be a source of income for them. In this way double benefit can be availed. The condition is that the house should not be in the name of the taxpayer.

How is the calculation done?

There are 3 conditions regarding HRA.

This will be 40/50 percent of your basic salary. The limit is 50 percent for metro cities (Delhi, Mumbai, Kolkata and Chennai) and 40 percent for non-metro cities.

How much HRA is the company giving you?

How much rent have you actually deposited – minus 10 percent of basic salary.

Dearness Allowance is also included in the calculation along with the basic salary, if you are getting the benefit of DA. The benefit of tax exemption will be available on the minimum amount that is fulfilled under the above three conditions

7th Pay Commission DA Hike: Good news on dearness allowance! Next time also it will increase by 4%, know by which formula…

The post House Rent Allowance : Even those who do not live in a rented house can claim HRA, adopt this method, even Income Tax will not say anything. first appeared on Rightsofemployees.com.

HRA Claim: Financial year 2024-25 is going on and filing of income tax returns has already started. Income Tax Department has released ITR forms. Apart from this, employers have sent information to their employees to give investment declaration and this process is going on in many institutions. There is a discussion going on among the people regarding the selection of new tax regime and old tax regime and there are many questions in the minds of taxpayers regarding which tax regime should be used to return income tax.

Mistakes made in claiming HRA can prove costly

In the old tax regime, people filing income tax returns are required to provide investment proof and a major component for this is HRA i.e. House Rent Allowance. By claiming HRA, a large section of the salaried class tries to save their tax, for which they usually claim HRA by giving rent slip. However, to make HRA claim, many times employees resort to such proof in return of which the employer can reject the claim. Keeping this in mind, we are telling you what things should be kept in mind and which you should avoid.

Avoid these mistakes while claiming HRA

Do not rely only on rent receipts

Often employees keep rent receipts in their office to claim HRA. This does not guarantee exemption from tax deduction in any case and apart from these, you should also attach some solid documents in your favor like bank account details etc.

Absence of rent agreement can cause problems

Many times, while making HRA claim, employees mention their parents, brother or any other relative etc. and say that the rent agreement was not made. If the matter is ever investigated and the rent agreement is not found, your HRA deduction may be rejected.

Paying in cash can give headache

If you have paid the landlord in cash and you do not have proof of it (not even a receipt), then your HRA claim may be rejected. You should always transact the rent into the landlord’s bank account instead of cash payment and should have the bank statement mentioning this.

Also Read-

• Public Holiday: Big news! All offices and schools will remain closed in these states on Friday
• EPF Interest Rates: Has PF interest arrived in your account? Check immediately with these methods
• Gold Price Today: Big news! Big fall in Gold price today, know today’s latest rates

The post HRA Claim Mistakes: If you claim house rent allowance then do not make this mistake, it will cause problems. first appeared on Rightsofemployees.com.

How much will DA increase?

If media reports are to be believed, then there may be an increase of 4 to 5 percent in dearness allowance for the half year from January to June. If the allowance increases even by 4 percent, then the DA of central employees will increase to 50 percent. Let us tell you that at present the allowance is 46 percent. The government had increased the allowance by 4 percent for the second half of the year 2023. Due to this, the allowance for the July to December half year has increased to 46 percent. If there is an increase of 5 percent in the allowance then it will cross 50 i.e. 51 percent.

HRA increases as allowance increases

As soon as the allowance of central employees is 50 percent or more, HRA will be revised. According to the recommendation of the Seventh Pay Commission, HRA will be revised when the allowance is 50 percent or more. For increase in HRA, cities have been divided under three categories – X, Y & Z.

How much will HRA increase?

Currently, employees living in cities/towns X,Y & Z are getting 27, 18 and 9 percent HRA respectively. But after the increase, if the central employee lives in X category cities/towns, then his HRA will increase to 30 percent. Similarly, the HRA rate for Y category will be 20 percent and for Z category it will be 10 percent. It means that due to the increase in HRA along with DA in the new year, there will be a huge increase in the salary of central employees.

The post 7th pay commission: Along with DA, HRA may also increase in the new year, know complete details first appeared on Rightsofemployees.com.

With this success of BJP, not only the stock market is excited but the expectations of the central employees have also increased. It is believed that dearness allowance i.e. DA can be increased by 5 percent for the first half of the year starting from January 2024. If this happens, the DA of central employees will cross the 50 percent mark. This will also increase the HRA i.e. House Rent Allowance (HRA) of central employees.

Why expect a 5 percent increase?

According to the data of AICPI index till the month of October, the index is at 138.4 points. There is a rise of 0.9 points in the index as compared to a month ago. Although the data for the months of November and December is awaited, but looking at the pattern so far, it is estimated that the biggest increase till date in dearness allowance from January to June 2024 can be seen.

Let us tell you that the score of dearness allowance is decided by the AICPI index. The data of different sectors in the index shows how much inflation is and in comparison to this, how much the allowance of central employees needs to be increased.

Hope also because of elections

Experts believe that there are many favorable circumstances in the first half of the year 2024 due to which a 5 percent allowance increase can be expected. In fact, Lok Sabha elections are also going to be held in the first half. Keeping this election in mind, the government can increase the allowance of central employees by 5 percent.

Let us tell you that the number of central employees is more than 50 lakh, while the number of pensioners is also around 64 lakh. This means that the government’s decision of 5 percent increase will affect more than 1 crore people. This is also a strong figure from the election point of view.

The post 7th Pay Commission: DA of central employees will increase by 5% on New Year ? see calculator first appeared on Rightsofemployees.com.

DA in the new year, the House Rent Allowance (HRA) is also going to increase. According to the recommendations of the Seventh Pay Commission, dearness allowance of central employees is increased twice a year on half yearly basis. The previous increase was made in October 2023 for the July-December half year. This increase was 4 percent. Due to this, the allowance of central employees has increased from 42 percent to 46 percent.

when will it be announced

According to the pattern so far, the increase in dearness allowance for the half year of January-June 2024 can be announced during the month of March. According to the current environment, it is believed that the government can once again increase dearness allowance by 4 percent. If this happens then the allowance of central employees will be 50 percent. Along with this, HRA of central employees will also increase.

How much will HRA increase?

In the recommendation of the Seventh Pay Commission, there is a provision to revise HRA when the dearness allowance is 50 percent or more. For HRA increase, cities have been divided under three categories – X, Y & Z. If the employee lives in X category cities/towns, his HRA will increase to 30 percent. Similarly, the HRA rate for Y category will be 20 percent and for Z category it will be 10 percent. Currently, employees living in cities/towns X,Y & Z are getting 27, 18 and 9 percent HRA respectively. It means that after the increase in HRA and DA, there is going to be a huge increase in the salary of central employees.

The post Central employees good news, House Rent Allowance (HRA) is also going to increase first appeared on Rightsofemployees.com.

After the increase in HRA, the salary received by the government employees will increase. HRA is given on the basis of the city in which the government employees work. House Rent Allowance is for salary class employees who live in a rented house. Employees are divided into three categories depending on the need and city of the house.

HRA is divided into 3 categories

House Rent Allowance is divided into 3 categories. These categories are X, Y and Z.

(i) Areas with a population of 50 lakhs and above come in the ‘X’ category. Employees falling in this category are given HRA 24 percent as per the recommendation of the Central Pay Commission (CPC) under the 7th Pay Commission.

(ii) ‘Y’ stands for area with population between 5 lakh to 50 lakh. The employees living here are given HRA of 16% of the basic salary.

(iii) Those employees come under ‘Z’ category where the population is less than 5 lakhs. Here HRA is given at 8%.

HRA can be increased to this much

Now employees can get HRA increased to 27% for X category, 18% for Y category and 9% for Z category. On the other hand, when the dearness allowance reaches above 50 per cent, the HRA will increase to 30 per cent, 20 per cent and 10 per cent respectively.

When HRA can be revised

The Modi government may soon increase the HRA as well. For this notification has already been issued by the government. At present, the DA received by the employees is currently 42 per cent. Dearness allowance is to be increased once again in July. It is believed that now it can increase to 46 percent.

The post 7th Pay Commission: Government will soon increase HRA of employees, house rent allowance can be increased by this much first appeared on Rightsofemployees.com.

There is doubly good news for central employees. Not only is there going to be an increase in their Dearness Allowance, but an increase in their House Rent Allowance is also set. In such a situation, know what is the new update of increase in dearness allowance and house rent allowance of central employees and till when their DA and HR are expected to increase.

There is a possibility of increase in dearness allowance

At present, central employees are getting dearness allowance at the rate of 42 percent. According to the figures of inflation, it is expected to increase by 4 percent. However, only after the final figures from January to June come, it will be decided that how much DA will increase. There will be a review of dearness allowance and dearness relief in July 2023. If there is an expected 4 per cent increase in the DA of central employees, then their dearness allowance will increase to 46 per cent.

When will there be an increase in house rent allowance

According to the rules, when the dearness allowance crosses 50 per cent, then there will be an increase in the HRA of the employees. That is, after July 2023, when the next review of dearness allowance will take place in January 2024, then if the DA crosses 50 percent, then the HRA of the employees will increase.

Currently, the rates of HRA given to central employees are 27 per cent, 18 per cent and 9 per cent. These three categories are decided according to the city, which are divided into X, Y and Z.

How much will the House Rent Allowance increase

under the Seventh Pay Commission, the next revision in the House Rent Allowance will be three percent. That is, on crossing 50 percent of DA, the HRA of the employees falling in the X category will be 30 percent. HRA of Y category employees will be increased from 18 percent to 20 percent. Similarly, the HRA of Z category employees will increase from 9 percent to 10 percent.

The post 7th Pay Commission: Double good news for central employees! Along with dearness allowance, HRA is also fixed. first appeared on Rightsofemployees.com.

There is a provision to get special exemption on the rent given to the people living on rent, but to get this exemption, you must have some important documents. Without this you will not be able to claim HRA. If you are also a taxpayer and want to claim tax exemption while filing ITR, then know what things should be kept in mind to avail this benefit.

You can claim HRA even while staying at your parents’ house.

Even if you live in your parent’s house, you can claim exemption under HRA to get income tax exemption. Let us tell you that almost every private employee gets HRA, which is a part of his CTC. Exemption for HRA can be claimed under section 10(13A) of Income Tax.

In such a situation, if a person lives in his parents’ house, he can claim HRA exemption for the rent of that house as well, if there is a solid document. According to the Income Tax rules, you can claim this exemption only through the rent receipt on annual rent up to Rs 1 lakh.

At the same time, you will have to give the PAN card number of the landlord for the rent higher than this. After this, the landlord will also have to pay tax on income above Rs 1 lakh and you will be able to claim HRA for the amount above that.

These documents are necessary for claiming HRA

According to income tax rules, if you want to get exemption under house rent allowance, then for this you must have the receipt of the rent paid. Without this you cannot claim the rent. For this, get a rent agreement done with your landlord. This is considered a strong proof of rent paid. This rent agreement should contain your name, landlord’s name, address, PAN number, Aadhaar number and stop duty paper as per the rules of that state. If you are paying any TDS on this, then mention the same in this agreement.

ITR file will have to be done by 31st July-

The season for filing income tax returns for the financial year 2022-23 or assessment year 2023-24 has come. The Income Tax Department has fixed its deadline till July 31, 2023. While you can file it till December 31, 2023 with late fees.

The post HRA Tax Exemption Documents! These documents are required for HRA claim, see the complete list here first appeared on Rightsofemployees.com.

Many rules have increased. Including House Rent Allowance. You can also use the house rent allowance for tax saving. But for this you have to keep in mind the changes in income tax.

When will you get exemption of house rent allowance

HRA is given by the company to its employees. Under Section 10(13A) of the Income Tax Act, salaried people get exemption from house rent allowance. The tax payer gets the benefit of this only if he chooses the old tax regime. This benefit will not be available in the new tax regime. That is, if you want exemption of house rent allowance, then you have to choose the old tax regime.

HRA Exemption Rules

You get this benefit only when you live in a rented house. If you have your own house then you will not get its benefit. It is 50 percent of your basic pay or the amount of actual rent paid after 10 percent of basic pay, plus 50 percent of basic pay’s DA or 40 percent of DA, whichever is less. Yes, you get a discount on that.

Many people claim that they pay rent to their spouse to avail house rent allowance, so you cannot claim such exemption under the Income Tax Act. However, rent paid to parents is included in this. You will have to submit the rent receipt as proof.

Factors Affecting House Rent Allowance

• basic pay
• house rent allowance received from the company
• amount of actual rent paid
• Proof of Residence in Metro and Non Metro

The post HRA Exemption Rules: If you are going to claim HRA then first read these rules first appeared on Rightsofemployees.com.

House Rent Allowance is one such tool, through which income tax can also be saved. HRA is exempt under section 10(13A) of the Income Tax Act, 1961 subject to certain conditions. The taxable income of a salaried person is calculated after deducting HRA. If an employee is living in his own house and does not pay rent for any house, then HRA is fully taxable.

The benefit of tax exemption in HRA is available only to salaried individuals. Along with this, it is also worth noting that the benefit of this exemption is available only to those who file income tax returns by choosing the old tax regime. Those opting for the new tax regime cannot avail tax deduction on HRA. It is also mandatory for HRA to be a part of the salary structure for tax exemption. People doing their own business do not get the benefit of this. HRA tax exemption depends on four factors. Salary (Basic Salary + DA), HRA component in salary, rent paid and location of rented accommodation.

How is HRA exemption calculated?

According to a report in India Today, Abhishek Soni, co-founder and CEO of Tax2win, says that a salaried person can avail HRA tax exemption on the amount he pays as house rent. Is. The calculation of HRA exemption depends on several factors. This exemption is given in the form of HRA, 50% of the salary (Basic Salary + DA) in metro cities and 40% for non-metro cities, paid more than 10% of the annual salary (Basic Salary + DA) Can be taken on the amount paid.

How to claim HRA exemption?

Sony says that to get HRA exemption, the employee has to submit the rent receipts and rent agreement to the employer. You need to submit Form 12BB to your employer to claim HRA exemption. This form contains the details of your paid rent, name of the landlord and PAN of the landlord. On paying rent above one lakh rupees annually, the employer has to give the PAN number of the landlord. An employee who lives in his parents’ house and pays rent is also entitled to HRA exemption.

The post House Rent Allowance: Find out the amount of HRA by looking at the salary slip, how to claim HRA exemption? first appeared on Rightsofemployees.com.

Significantly, last year these forms were issued in the first week of April. Many types of investments help you to save income tax. One of these is House Rent Allowance ie HRA. If you are a salaried employee then you can take advantage of this. Let us tell you that to save tax, you can take advantage of HRA only in the old tax system. This will not be available in the new tax system.

Will get benefit in these circumstances

House rent allowance ie (HRA) in salary is a part of taxable income. Income tax is exempted under section 10 (13A) of the Income Tax Act. Keep in mind some circumstances for how much tax can be saved from HRA. In the situation in which the minimum amount will come, you can take advantage of tax exemption of HRA.

In the first situation, first of all, you should see how much HRA is there in the salary. HRA is 50% of the basic salary in metro cities and 40% of the salary in non-metro cities. The third condition is the amount left after deducting 10% of the annual salary from the annual house rent.

This is how you can save

You can understand how much you can save in HRA through an example. A person works in Delhi and lives in a rented house. His rent goes to 15 thousand rupees every month. He gets a maximum of one lakh rupees as HRA annually from his company. At the same time, his basic salary is 25 thousand rupees and dearness allowance is two thousand rupees. In this way, a salaried person can save a maximum of one lakh rupees.

These documents are necessary

To get exemption through house rent allowance, you must first have a rent agreement. Monthly rent, fixed time limit of the agreement, and expenses should be mentioned in this agreement. This rent agreement should be in stamp paper of Rs 100 or Rs 200. On the other hand, if the annual rent is more than one lakh rupees, then it is also necessary to have the PAN card of the landlord.

Apart from this, you should also have a receipt for paying the rent. Let us tell you that if your annual income is up to Rs 50 lakh, then you will have to fill Form 1 for ITR filing. Those earning more than 50 lakhs will have to fill ITR Form 2.

The post ITR Rebate: HRA can save tax up to one lakh rupees, know the complete calculation of savings first appeared on Rightsofemployees.com.

The AICPI index has reached 132.5. In such a situation, an increase of 3 percent in the dearness allowance (DA Hike) of central employees is believed to be fixed. Due to this, the salary of the employees (high salary bracket) will increase by more than 20 thousand rupees. More than 1 crore employees and pensioners are going to get direct benefit from this.

DA will reach 41%

After 38% dearness allowance and dearness relief, the Modi government at the center can once again increase the dearness allowance (DA Hike) of central employees by 3% for the new year i.e. January 2023. However, this increase will happen in March. According to the data of AICPI till November 2022, an increase of 3 percent in dearness allowance is clearly visible. If dearness allowance is increased by 3 percent, then it will reach 41% (Dearness Allowance).

Minimum salary will increase after DA

Now let’s talk about the fitment factor. There are talks of increasing this as well. If this happens then there will be a big jump in the salary. The increase in the fitment factor under the 7th Pay Commission will increase the basic salary of central employees by Rs 8,860. This increase can be given after DA Hike. Currently, the fitment factor is 2.57 times. It is likely to be 3.68 times in the coming days. If this happens then the basic salary at level-3 will increase from Rs.18000 to Rs.26000. Directly there will be an increase of Rs 8000 in the salary of the employees. Along with this, the effect will also be seen in the payment of DA.

Salary will increase by Rs 49,420 due to fitment factor

The basic salary of a central employee at Level-3 is Rs 18,000, so excluding allowances, his salary will be 18,000 X 2.57 = Rs 46,260. If the fitment factor becomes 3.68 times, then the salary will reach 26000X3.68 = Rs 95,680. Employees will get bumper benefit in this. This means that overall the employees will get an increase of Rs 49,420 as compared to the existing salary. This calculation is on the minimum basic salary. Those with maximum salary can get a bigger benefit.

What is Fitment Factor?

The formula for fixing the Basic Salary of all Central Government employees is the Fitment Factor. Under the 7th Pay Commission, the salary of the employees was increased by the fitment factor itself. The fitment factor was increased in 2016. At that time the basic salary of central employees was increased from Rs.6000 to Rs.18000. While fixing the salary of central employees, the basic component of the employee, excluding allowances (Dearness Allowance (DA Hike), Traveling Allowance (TA), House Rent Allowance (HRA) etc.), is arrived at by multiplying the fitment factor by 2.57.

The post DA Increased: Good news for central employees! Salary is going to increase up to ₹ 49,420, will get 41% dearness allowance first appeared on Rightsofemployees.com.

If you are employed, then your salary (salary) includes many such options (perks), which can be helpful in reducing the tax burden. Of these, some options require full payment of tax, while there are 10 such options which come under tax exemption. In such a situation, every employed person should pay attention to whether he is able to take advantage of the facilities provided by the company or not.

1. Employees’ Provident Fund (EPF)

According to the EPF Act, the company invests 12 percent of the basic salary and allowances of the employee in EPF. The company also has to invest the same amount. The employee’s contribution is tax exempt, which is up to Rs 1.5 lakh. This exemption is available under section 80C of the Income Tax Act. Interest earned on this also comes under the purview of tax exemption.

2. Leave Travel Allowance (LTA)

For the employees to travel anywhere in the country with their family, companies provide Leave Travel Allowance, which is tax exempt. This discount is available only on travel by train, airplane or public transport. In this, the shortest distance to reach the destination is made the basis. This part of the salary can be deposited by the employee by depositing the booked ticket with the company. This benefit is available only if you travel twice in four calendar years.

3. House Rent Allowance (HRA)

This part of the salary is given to the employee in lieu of payment of house rent. To get tax exemption on this, it is necessary that it should be part of the salary. You can claim tax exemption on the amount received for HRA with the specified limit.

4. Car Maintenance Allowance

Bank Re-imbursement can be claimed up to a limit on the cost of the car, as per the market. You can also get tax exemption on this. However, it depends on whether the car belongs to the company or the employee. This reimbursement is available for some special office work and many personal work.

5.
Most of the multinational companies give food coupons for food and drink during the work in the food coupon office. One can get tax exemption of up to Rs 50 on one meal. Twice a day for 22 working days in a month can avail tax exemption of up to Rs 26,400 annually.

6. Children Education Allowance

In lieu of payment of fees for the child, companies pay an education allowance of Rs 1,200 annually or Rs 100 per month to the employee. This facility is available for two children only. In addition, one can claim tax exemption on payment of tuition fees under Section 80C of the Income Tax Act.

7. Discount on Hostel Expenses

Companies give hostel expenditure allowance to their employees. Under this, the employee gets an annual allowance of Rs 3,600 or Rs 300 per month on the hostel expenses of the child, which is tax-exempt. This discount is available for maximum 2 children only.

8. Phone Bill Re-imbursement

This includes both telephone and mobile phone bill re-imbursement. Telephone charges including broadband internet connection are covered under this. Some companies provide this facility to their employees, which comes under the purview of tax exemption.

9. Uniform Allowance

The employees get this allowance for the maintenance of their uniform while on duty. You can also get tax exemption on the expenses incurred in the purchase and maintenance of the uniform.

10. Gift Voucher

Companies sometimes give gifts to their employees, on which tax exemption is available. However, the condition in this is that its total value does not exceed Rs 50,000 annually, only then can you get tax exemption.

The post ITR New Update: Do you know about tax rebate include in your salary, check detail here first appeared on Rightsofemployees.com.

For most employees, House Rent Allowance (HRA) is a common component of their salary structure. Although it is a part of the salary, HRA, unlike basic salary, is not fully taxable. Subject to certain conditions, a part of HRAgets exempted under Section 10 (13A) of the Income-tax Act, 1961.

The amount of HRA exemption is deductible from the total income before arriving at a taxable income. This helps the employee save tax. Remember, the HRA received is fully taxable if an employee is living in his own house or if he does not pay any rent.

Who can avail HRA?
The tax benefit is available only to a salaried individual who has the HRA component as part of his salary structure and is staying in a rented accommodation. Self-employed professionals cannot avail the deduction.

Click here to use our HRA Calculator 

How much is exempted?
The exemption for HRA benefit is the minimum of:
i) Actual HRA received

1. ii) 50% of salary if living in metro cities, or 40% for non-metro cities; and
   iii) Excess of rent paid annually over 10% of annual salaryFor calculation purpose, the salary considered is ‘basic salary’. In case ‘Dearness Allowance (DA)’ (if it forms a part of retirementbenefits) and ‘commission received on the basis of sales turnover’ is applicable, they too are added to compute the minimum HRA exemption available.The tax benefit is available to the person only for the period in which the rented house is occupied.Example of HRA calculation
   Let’s say an individual, with a monthly basic salary of Rs 15,000, receives HRA of Rs 7,000 and pays Rs 8,400 rent for an accommodation in a metro city. The tax rate applicable to the individual is 20 percent of his income.

   To avail HRA benefit, the least of the following amount (yearly) is exempted, rest is taxable:
   i) Actual HRA received = Rs 84,000
   ii) 50% of salary (metro city) = Rs 90,000 (50% of Rs 1,80,000)
   iii) Excess of rent paid annually over 10% of annual salary = Rs 82,800 (Rs 1,00,800 – (10% of Rs 1,80,000))

   It shows that of Rs 84,000 actually received as HRA, Rs 82,800 gets tax exemption and only the balance of Rs 1,200 gets added to the employee’s income, on which a tax of Rs 240 ( 20 per cent slab ) gets payable.

   Documents
   HRA exemptions can be availed only on submission of rent receipts or the rent agreement with the house owner.

   It is mandatory for the employee to report the Pan Card of the ‘landlord’ to the employer if the rent paid is more than Rs 1,00,000 annually.

   Special cases
   There could be special scenarios in claiming HRA tax benefit, such as:

   Paying rent to family members
   The rented premises must not be owned by the person claiming the tax exemption. So if you stay with your parents and pay rent to them then you can claim that for tax deductions as HRA. However, you cannot pay rent to your spouse. As, in the view of the relationship, you are supposed to take the accommodation together. Thus, these transactions can invite the scrutiny from the Income -tax Department.
   
   
   
   Even if you are renting the house from your parents, make sure you have documentary evidence as proof that financial transactions regarding your tenancy takes place between you and your parent. So keep a record of banking transactions and rent receipts because your claim can get rejected by the tax department if they are not convinced by the authenticity of the transactions. Recently, there has been an instance in which the HRA claim of a salaried taxpayer was rejected by the Mumbai income tax appellate tribunal because the claim for HRA did not appear genuine to the tax officials.

   Also Read: For tax relief, you need proof of rent paid to kin

   Also Read: 10 things to do so that HRA claim does not get rejected

   2. Own a house, but staying in a different city
   One can avail the simultaneous benefit of deduction available for the home loan against ‘interest paid’ and ‘principal repayment’ and HRA in case your own home is rented out or you work in another city.

   Individuals who don’t get HRA but pay rent
   There may be some employees who might not have HRA component in their salary structure. Also, a non-salaried individual might be paying rent. For them, Section 80 (GG) of the Income-tax Act offers help.

   An individual paying rent for a furnished/unfurnished accommodation can claim the deduction for the rent paid under Section 80 (GG) of the I-T Act, provided he is not paid HRA as a part of his salary by furnishing Form 10B.

   How much
   The least of the following is available for exemption from tax under Section 80GG:
   (i) Rent paid in excess of 10% of total income
   (ii) 25% of the total of the total income*
   (iii) Rs 5,000 per month

   *Under this section, the total income is calculated as gross total income minus long-term capital gains, the short-term capital where Securities Transaction Tax (STT) has been paid and deductions available under Sections 80C to 80U, except Section 80GG.

   Conditions
   While claiming a tax deduction, one must remember that the individual himself or his/her spouse, or minor child, or as a member of the Hindu Undivided Family (HUF) must not own any accommodation. Also, if the individual owns any residential property at any place and earns rent from it then no deduction is allowed.

   One can avail the simultaneous benefit of deduction available for the home loan against ‘interest paid’ and ‘principal repayment’ and HRA in case your own home is rented out or you work in another city. However, the same is not available in case of Section 80GG.

The post HRA Exemption Rules first appeared on Rightsofemployees.com.