Can you submit an HRA claim for rent paid in your hometown?

Let’s start by taking a look at the legislation that governs HRA for workers. 

According to the Income Tax Act, an employee is permitted to request HRA tax credits from their employer under specific circumstances. As long as the employee is residing in the house and all other qualifications are satisfied, this clause does not specify where an employee may claim an HRA exemption. The law further stipulates that to be eligible for HRA benefits, an employee must have paid the rent in full and the apartment through which the rent was paid must not belong to the employee. So long as you fulfill both requirements, you can apply to HRA.

Please be aware that if you are a house co-owner, you are not qualified for an HRA. You cannot receive this benefit if you live in a home that you share with your parents, siblings, or spouse. Similarly, if you got into a tax planning arrangement with your employer to rent you a property, and they in turn paid you the rent, you are not eligible to file for HRA. Do you qualify for both a house loan and HRA benefits? Additionally, there is no requirement in the law that rent be paid to the same landlord all year round.

An employee may relocate as often as required and claim HRA for rent paid to various landlords during the year, so long as HRA has not already been claimed more than once for the same time. This may be presented more clearly and with the help of an example. It is always conceivable that employees and employers are based in various regions of the country or even in different countries in the world of the internet and the technology that the number enables. Let’s say a software developer works for an American corporation, and his pay includes HRA.

Indian law still permits an Indian worker to file for HRA even in typical circumstances and even when the employer and employee are in two different countries, so long as they fulfill the fundamental conditions of having paid rent to inhabit an apartment, that he does not own. The legal criteria discussed above make it abundantly evident that the claim made by the human resources departments of these businesses is untrue and illegal.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.