Your rent is taxable subject to exemption allowed by the income tax act. If your salary income comprises of House Rent Allowance (HRA), some (or all) portion of your rent could be tax-free. however, u need to have certain facts in hand to determine that. Lowest of below three is tax-free: 1. You live in 4 Metros or not. If yes, upto 50% of basic salary ( Dearness Allowance i.e. DA, if any) (otherwise 40%) 2. Actual rent paid over 10% of salary ( DA) 3. HRA received
You need to calculate the above for each month, and add to find your tax free rent. The exemption is calculated for financial year basis, i.e. for 2006-07 and 2007-08 separately.
