BENGALURU: Are you curious to know the secret of saving more money? Are you aware of the components from your salary package which would help you with tax deductions? Yes, there are some components that can make you save money and rescue from tax imposition. One such component is your HRA.

Since few years, the house rent cost has been an unbearable factor for every common man. With intent to help their employees to meet these costs, many organizations and governmental bodies provide House Rent Allowances. HRA is generally paid as a component of salary package to the employees. This will offers employers to cope up with the increasing accommodation cost thereby allowing tax deductions.

The Economic Times has been able to identify these five smart ideas about tax deduction on HRA:

1. HRA Deduction Under Section 10(13A) of IT Act: A tax exemption is permissible for house rent allowance under the section 10(13A) of the income tax act to such employees.

2. Eligibility: HRA is received by the salaried employees in an organization which offers a hra component as part of a salary component to its employees. Along with this the employee should stay in a rented house to get the benefits.

3. Exemption Amount: There are three factors consider for manipulating the exemption amount: minimum of the (i)actual HRA received, (ii)the difference of rent paid and 10 percent of the salary and the last factor is (iii)50 percent of the salary for the employees residing in metros otherwise 40 percent of the salary. 

4. HRA Exemptions: The house rent exemptions is availed only if the employee submits an agreement with the owner of the house or a house rent receipt to the relevant authority in the organization.

5. Other Circumstances: The person who claims for the tax exemption should make sure that he is not staying in rented a premise that is owned by himself. You are even eligible for tax deduction when you stay with your parents and pay rent to them.

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