Income Tax Calculation of House Rent Allowance U/S 10 (13A)

Income Tax Calculation of House Rent Allowance U/S 10 (13A)

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: 89,000
(a).    Actual amount of HRA received=1,40,000

(b).    Expenditure of rent in excess of 10% of salary (including D.A. presuming that D.A. is taken for retirement benefit) (1,44,000-55,000) = 89000

(c).    50% of Salary(Basic+ DA) 2,75,000

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
3 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

 

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