ITR 2024: Companies pay their employees house rent allowance under the cost to company structure. Employees can get exemption on this amount under Income Tax Section 10(13A). However, there are some conditions regarding this exemption. The question is that if the employer does not pay the house rent allowance, then in this situation how can the employees avail the exemption under income tax.
ITR 2024: Companies pay house rent allowance to their employees. This payment is made to the employees under the cost to company structure. Employees can get exemption on this amount under Income Tax Section 10(13A).
However, there are some conditions regarding this exemption. The question is that if the employer does not pay the house rent allowance, then in this situation how can the employees avail the exemption under income tax.
This situation also arises for those self-employed professionals. Because the facility of house rent allowance is not available to the working professionals who do their own work.
Exemption is available under section 80GG of Income Tax
Do you know that for such a situation, taxpayers get exemption under section 80GG of Income Tax . Yes, if you also do not get house rent allowance, then you can get exemption under this section.
What is Income Tax Section 80GG?
Section 80GG of the Income Tax Act allows a taxpayer to avail tax exemption on the rent paid in a financial year. However, this deduction is determined on certain grounds.
- 5000 rupees per month (60 thousand rupees annually)
- 25 percent of total income
- Actual rent paid after deducting 10% of the total income
Note that long term capital gains and short term capital gains under section 111A are not included in the total income. If you run a business in your own house, then you do not get this facility. Let us tell you here that the benefit of this tax exemption can be availed only under the old tax regime.
How to get exemption under section 80GG
You can claim exemptions while filing income tax returns. You can keep your rent agreement or rent receipt for future use. Apart from providing all the details in the ITR form, you will also need to fill the 10BA form.
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