Many salaried employees in India live in housing societies where they pay rent to their landlords and an additional maintenance fee to the society. A common question that arises is whether these maintenance charges qualify for tax exemption under the House Rent Allowance (HRA) provisions. Let’s break down the details in a simple and engaging way.
HRA is a key component of many employees’ salary structures, providing tax benefits to those living in rented accommodation. Under Section 10(13A) of the Income Tax Act, salaried employees can claim tax exemption on HRA if they pay rent and receive HRA as part of their salary.
However, this exemption applies strictly to rent payments for residential accommodation. Any other expenses, such as electricity, maintenance, or utility charges, are not explicitly covered under this provision.
The Income Tax Act does not specifically mention whether maintenance charges can be considered part of rent for HRA exemption. Experts have differing opinions on this matter:
HRA exemption is determined by taking the lowest of the following amounts:
For example, if an employee in Delhi receives ₹3,00,000 in HRA annually, has a basic salary of ₹7,20,000, and pays ₹30,000 per month in rent, the exemption will be calculated as follows:
The lowest amount (₹2,88,000) is exempted, and the remaining ₹12,000 is taxable. Since maintenance charges are not included in rent, they cannot be added to increase the exemption amount.
Since maintenance charges do not qualify for HRA exemption, it is advisable to:
You can claim HRA tax exemption in two ways:
While HRA provides significant tax relief to salaried individuals, it applies strictly to rent payments. Maintenance charges, even if included in rental agreements, do not qualify for exemption. To ensure a smooth tax filing process, tenants should keep their payments organised and consult a tax professional for any uncertainties. Understanding these rules can help avoid tax complications and make the most of available exemptions.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Published on: Mar 28, 2025, 4:15 PM IST
Suraj Uday Singh
Suraj Uday Singh is a skilled financial content writer with 3+ years of experience. At Angel One, he excels in simplifying financial concepts. Previously, he cultivated his expertise at a leading mortgage lending firm and a prominent e-commerce platform, mastering consumer-focused and engaging content strategies.
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