38.5k to 40k
What is the Ideal Range for Monthly House Rent to maximize on HRA Tax Exemption
Hi, Scenario: If my CTC is say Rs 25 Lakhs, with HRA allowance of Rs 3.68 Lakhs, and my Basic Salary is Rs 9.2 Lakhs Let's assume my yearly contributions towards tax saving instruments are: Life Insurance: Rs 40,000 Medical Insurance: Rs 10,000 Mutual Funds: NIL Fixed Deposits: NIL Can you suggest what would be a good range for my monthly house rent - so that I am not spending too much out of pocket AND so that I am also able to maximize my tax exemption from HRA. For example - should It be between: Rs 20k to Rs 25k Rs 25k to Rs 30k Rs 30k to Rs 35k Thanks!
Asked 3 years ago in Income Tax
rent should be around 40K. The exemption is calculated basis the following
The deduction available is the least of the following amounts:
- Actual HRA received
- 40% of basic salary for those living in non-metros
- Actual rent paid - 10% of basic salary
If your rent is in range of 35 to 37.5k per month then based on above figures you could maximize the benefits or if you dont wish to pay such rent you can switch to new regime as you dont have much 80C and 80D deduction.
Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.
Thank you.
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