How much HRA can be claimed without proof?
As per the Income Tax Act, an individual can claim a deduction for House Rent Allowance (HRA) received from their employer, subject to certain conditions. If an employee is paying rent for a residence but does not receive HRA from their employer, they can claim a deduction under Section 80GG of the Income Tax Act.
The amount of deduction allowed under Section 80GG is subject to the following conditions:
- The employee should not have received any HRA during the financial year.
- The employee, their spouse, or their minor child should not own any residential property at the place where they are currently residing or carrying on business.
- The employee should not have self-occupied residential property in any other place.
- The employee should be paying rent for the place of residence.
Under Section 80GG, an individual can claim a deduction for the lower of the following amounts:
- Rs. 5,000 per month.
- 25% of the total income for the financial year.
- Actual rent paid minus 10% of the total income for the financial year.
Note that to claim the deduction under Section 80GG, the employee is not required to provide any proof of rent payment. However, the employee should maintain a record of rent payments made during the financial year as it may be required in case of any scrutiny by the income tax department.