How to plan HRA exemptions

I know many fellas who go crazy when it comes to collecting IT proofs in India esp. about HRA. Normally they will go with an approximate amount which is close to HRA s/he actually has been paid. This may not be a right approach always.

HRA is calculated as follows:

• Actual amount of HRA received during the relevant period.
• Rent paid less 10% of Basic Salary
• An amount equal to 50 percent of basic salary , where the residential house is situated at Mumbai, Calcutta, Chennai, Delhi and an amount equal to 40% of salary where the residential house is situated at any other place

E.g. Let's take an example and see what will happen in a scenario where
Monthly Basic is 35000, HRA is 19000 and Rent paid is 19000.

• Actual amount of HRA = 19000.
• Rent paid less 10% of Basic Salary = 19000 - 3500 = 15500
• An amount equal to 50% or 40% of basic salary 35000 * 0.50 = 17500.00

In this case the amount that will be taken in account for exemption will be 15500 per month.

Had the rent been calculated more closely, income tax payee would have been at advantage. I follow a simple method, rent should be calculated as follows.

Actual Rent - 10% of Basic should be > HRA Paid

In above example - the rent can be calculated as follows.

Actual Rent - 3500 should be > 19000

One of the closest number could be be 23000.00 in which case, the revised calculation of HRA will be as follows.

• Actual amount of HRA = 19000.
• Rent paid less 10% of Basic Salary = 23000 - 3500 = 19500
• An amount equal to 50% or 40% of basic salary 35000 * 0.50 = 17500.00

Least of the above calculated amounts is 17500.00 which means a yearly Tax Exempted amount would be 24000 (12 * (17500 - 15500)) and a net tax benefit of 7200 if you are falling in 30% tax bracket. :-)

Hope this helps.

How to resolve issues @ Birla Sunlife Insurance

If you ever happen to run into issues with the payments made for BSLI policy which is not reflecting on your account and don't know who to catch hold of, you may want to get in touch with Market Support Executive.

Their so called toll free numbers don't work normally, but the beauty is that if I call their mumbai number (The number to connect to their call center directly) I am able to talk to the customer support executives (charges rs. 1.5/Minute!)

Even if you call their call center, Customer Support executives will redirect you to one of the local office and ask you to get in touch with the Market Support Executive (MSE)

Please make sure to get a complaint registered and ask for Complain Number. This will save you from telling the same story multiple times to multiple people.

I was based out of Chennai when I ran into this issue and below is the number to Birla Sunlife Insurance office in Chennai who helped me out.

+91-44-28477392
+91-44-28477397

Hope this helps

How to find EPF Details Online

I have shifted the job and was in the process to get my Provident Fund transferred to at new employers'. In the process I found this website to track your claims. I am glad to see the disclaimer on the site that confirms when last the site data was updated and these dates are not older than 2 weeks.

At least using this site, I could validate the correctness of the PF number.

http://epfindia.nic.in/indiaepf/loginnew.aspx

Hope this helps.