For most employees, the House Rent Allowance (HRA) is a standard component of their pay package. It is a sum that your employer gives you as part of your pay. Coming to your query, can we claim HRA in new tax regime? Only if you want to stick with the previous tax system, you can keep claiming HRA. I have shared more details related to the new tax regime below.
Can HRA Be Claimed in New Tax Regime?
Under the new tax regime introduced in India by the Finance Act, 2020, taxpayers can pay lower tax rates by foregoing several exemptions and deductions available under the old regime.
Let me tell you, your salary\'s HRA component gets fully taxed if you use the new tax regime.
By lowering several deductions, the new tax regime streamlines the tax structure. It gives taxpayers the option to select between lower tax rates and the advantages of the previous regime.
However, under Section 10 (13A) of the previous tax system, the HRA exemption existed, depending on many circumstances. It includes real rent paid and basic pay. I think it is good for taxpayers eligible for large deductions, such as HRA or Section 80C investments.
You can prefer the old regime if the HRA exemption significantly reduces your taxable income. But I would say you go with the new regime if you don’t have substantial deductions. I hope this resolves your query.
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How Much HRA Can be Claimed Without Proof
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Wondering can we claim HRA in new tax regime? As of the financial year 2023-24, under the new tax regime introduced in India, taxpayers are not allowed to claim many deductions and exemptions that were available under the old tax regime. This includes the House Rent Allowance (HRA) exemption.
Can I Claim HRA in New Tax Regime?
It's crucial to note that the House Rent Allowance (HRA) exemption will not apply if you switch to the New Tax framework. The new tax regime offers lower tax rates compared to the old tax regime but disallows several exemptions and deductions such as:
House Rent Allowance (HRA)
Leave Travel Allowance (LTA)
Standard deduction
Deductions under Section 80C (e.g., for investments in PPF, ELSS)
Deductions under Section 80D (e.g., for health insurance premiums)
Interest on housing loan under Section 24(b)
Therefore, if you opt for the new tax regime, you cannot claim HRA exemption. However, you can choose to stay in the old tax regime if the deductions and exemptions you claim outweigh the benefits of the lower tax rates in the new tax regime.
Taxpayers have the option to choose between the old and new tax regimes at the time of filing their income tax returns each year. Your query for can we declare HRA in new tax regime should be solved.
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Authors Of The Question
Can We Claim HRA in New Tax Regime?
priya
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2 Answers
6 months
2024-06-12T09:53:41+00:00 2024-06-28T21:21:50+00:00Comment
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