Calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years
Example 4
For Assessment year 2018-19
Illustrative calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (with valid PAN furnished to employer).
|
S.No |
Particulars |
Rupees |
|
1 |
Salary |
3,50,000 |
|
2 |
Dearness Allowance |
2,00,000 |
|
3 |
House Rent Allowance |
1,40,000 |
|
4 |
House Rent Paid |
1,44,000 |
|
5 |
General provident Fund |
36,000 |
|
6 |
Life Insurance Premium |
4,000 |
|
7 |
Subscription to Unit-Linked Insurance Plan |
50,000 |
Computation of total income and tax payable thereon
|
S.No |
Particulars |
Rupees |
|
1 |
Salary + Dearness Allowance + House Rent Allowance 3,50,000 + 2,00,000+1,40,000 = 6,90,000 |
6,90,000 |
|
2 |
Total Salary Income |
6,90,000 |
|
3 |
Less: House Rent Allowance exempt U/s 10(13A): Least Of: (a) Actual amount of HRA Received = 1,40,000 (b) Expenditure of rent in excess of 10% of salary (including DA presuming that DA is taken for retirement benefit) (1,44,000 – 55,000) = 89,000
(c) 50% of Salary (Basic + DA) = 2,75,000 |
89,000 |
|
|
Gross Total Income |
6,01,000 |
|
|
Less: Deduction U/s 80C (i) GPF Rs.36,000/- (ii) LIC Rs. 4,000/- (iii) Investment in Unit-Linked Insurance Plan Rs.50,000/- Total =Rs.90,000/- |
90,000 |
|
|
Total Income |
5,11,000 |
|
|
Tax payable |
14700 |
|
|
Add: (i) Education Cess@2% (ii) Secondary and Higher Education Cess @1% |
294 147 |
|
|
Total Income Tax payable |
15141 |
|
|
Rounded off to |
15140 |
Source: https://www.incometaxindia.gov.in