Union Budget 2016: Finance Minister Arun Jaitley has increased house rent allowance from Rs 24,000 to Rs 60,000. We look at the maths on how it is going to affect your finances.
In a relief to people living in rented accommodation, Finance Minister Arun Jaitley on Monday announced in his budget speech that deduction under section 80GG on house rent allowance(HRA) will be increased from Rs 24,000 to Rs 60,000.
“The people who do not have any house of their own and also do not get any house rent allowance from any employer today get a deduction of Rs 24,000 per annum from their income to compensate them for the rent they pay. I propose to increase the limit of deduction in respect of rent paid under section 80GG from Rs 24,000 per annum to Rs 60,000 per annum, which should provide relief to those who live in rented houses, ” Finance Minister Arun Jaitley said in his budget speech.
According to budget provision, the existing provisions of Section 80GG provide for a deduction of any expenditure incurred by an individual in excess of ten per cent of his total income towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence if he is not granted house rent allowance by his employer, to the extent such excess expenditure does not exceed Rs 2,000 per month or 25 per cent of his total income for the year, whichever is less. These amendments are proposed to be made effective from the 1st day of April, 2017 and shall accordingly apply in relation to assessment year 2017-18 and subsequent years.
We look at the maths on how it is going to affect your finances
Calculations done in partnership with Felix advisory