Finance

Maximizing Tax Savings with HRA Exemption in 2023-24

The HRA exemption can be a powerful tool for tax savings for salaried individuals in India. Understanding the various aspects of HRA exemption, including calculation, documentation, and eligibility, can help you make the most of this benefit and reduce your tax liability.

May 6, 2023
Mohit Sahni
Maximizing Tax Savings with HRA Exemption in 2023-24

The House Rent Allowance (HRA) exemption is a valuable tax-saving tool for salaried individuals in India who reside in rented accommodations. However, to avail of this benefit, one must opt for the old tax regime. This exemption can lead to substantial savings on your taxable income, easing your financial burden. If the annual rent exceeds ₹1 lakh, the landlord's PAN must be submitted. 

Interestingly, even if your employer does not provide HRA, you can claim a deduction under specific circumstances. This article will provide an in-depth understanding of HRA exemption and its benefits for Indian employees.

HRA Exemption Calculation: Factors to Consider

The HRA exemption is determined by the lowest of the following three criteria:

  • Actual HRA received: This is the actual amount you receive from your employer as a part of your salary package toward house rent.
  • People living in metro cities (Delhi, Kolkata, Mumbai, or Chennai) receive 50% of their basic salary, whereas those living outside of metros receive 40%. Metro cities are considered more expensive in terms of living costs, which is why a higher percentage is allowed as an exemption for those residing in these cities.
  • Actual rent paid minus 10% of basic salary: This criterion ensures that a certain portion of your rent paid is considered taxable income.

Use the HRA deduction calculator on the Income Tax Department's website to calculate your HRA deduction. By entering your basic salary, HRA received, and actual rent paid, you can determine the exemption amount and adjust it against your taxable income.

Required Documentation for HRA Tax Exemption Claims

To claim HRA exemption, you must submit certain documents to your employer, including rent receipts and rental agreements. These documents serve as proof of your rented accommodation and the amount paid as rent. If the annual rent exceeds ₹1 lakh, your landlord's PAN must also be provided. This helps the Income Tax Department track high-value transactions and ensure tax compliance.

Based on these proofs, employers will grant HRA exemption in Form 16. Form 16 is a certificate issued by your employer, providing a detailed summary of the salary paid and tax deducted at source (TDS) on your behalf.

Claiming Deduction without Employer-Provided HRA

Rent paid without HRA can still be deducted under Section 80GG of the Income Tax Act if you do not receive HRA from your employer. However, you must meet certain conditions:

  • You must be self-employed or salaried and have not received HRA during the year you claim 80GG. This implies that if you receive HRA for part of the year, you can only claim the 80GG deduction for the remaining months.
  • You, your spouse, or your minor child must not own residential accommodation in your current city of residence or employment. This condition prevents taxpayers from claiming a double benefit on both self-owned and rented properties.

In addition to the maximum deduction of 5,000 per month, Section 80GG also limits deductions to 25% of adjusted total income.

HRA Exemption for Individuals Living with Parents

You can also claim HRA if you reside in your parent's house. To do so, sign a rental agreement with your parents and transfer the rent to them monthly. Your parents must report this income on their tax returns. 

This can result in tax savings on the family income if their other income falls below the basic exemption limit or is taxed at a lower rate. Ensure to maintain proper documentation, such as rent receipts and bank statements showing rent transfers, to validate your claim.

Claiming Both HRA and Home Loan Interest Deductions

Even if you have a home loan, you can claim both HRA and home loan interest deductions if the houses are in the same city. To do this, you must demonstrate that the rented house and the house with the loan are at different locations. There must be valid reasons for not residing in your self-owned house, such as:

  • Living in another city for work or other personal reasons.
  • Proximity to your workplace or children's school makes residing in the rented house more practical.
  • Your purchased home is under construction, requiring you to rent a temporary residence.
  • Renting out your own house for additional income and living in a different rented property.

In such cases, you can claim deductions under Section 24(b) for home loan interest payments, up to ₹2 lahks per annum, and Section 80C for principal repayments, up to ₹1.5 lahks per annum.

It is important to note that such claims are frequently scrutinized by tax officials, who may reject part or all of the claim if dissatisfied, especially if the claimed amount is relatively high. To substantiate your claim, maintain proper documentation, including rental agreements, home loan certificates, and rent receipts.

Important Tips for Maximizing HRA Exemption Benefits

  • Timely submission of rent receipts and rental agreements to your employer is crucial to ensure the seamless processing of your HRA exemption claim.
  • Regularly review and update your rental agreement, especially if there is a change in rent amount or rental duration.
  • Keep a record of rent payments made through bank transfers, as cash payments might not be considered valid proof by tax authorities.
  • If you are claiming both HRA and home loan interest deductions, maintain separate documentation for each to avoid confusion during tax filing.

To sum this up, the HRA exemption can be a powerful tool for tax savings for salaried individuals in India. Understanding the various aspects of HRA exemption, including calculation, documentation, and eligibility, can help you make the most of this benefit and reduce your tax liability.

Psychology

What Your Brain Says About Virtual Meetings and Why You Need Breaks

August 1, 2023
Mohit Sahni
What Your Brain Says About Virtual Meetings and Why You Need Breaks

Ever felt like your brain was stuck in a never-ending loop of video meetings, a mind-numbing carousel of screens and voices? You’re not alone. Millions around the world have been in that same sinking boat, trapped in back-to-back video conferences that drain the life out of the workday.

But what if there was science behind this feeling? What if it wasn't just a gut reaction but a measurable response happening inside your brain? 

Microsoft decided to dive into this very question, peeling back the layers of our Zoom-fatigued minds.

With electroencephalogram (EEG) caps and a well-thought-out experimental design, they set out to dissect this modern-day conundrum. And what they found was not just fascinating; it was enlightening.

Welcome to the deep dive into the scientific underbelly of meeting fatigue. 

The Back-to-Back Meeting Phenomenon

What Your Brain Says About Virtual Meetings and Why You Need Breaks
Source: Microsoft’s Human Factors Lab

We all felt it: the accumulating stress from one meeting to the next. Microsoft's study, conducted among people participating in video meetings and monitored by electroencephalogram (EEG) equipment, put data into our feelings. As consecutive video meetings increased, so did stress.

“Our research shows breaks are important, not just to make us less exhausted by the end of the day, but to actually improve our ability to focus and engage while in those meetings,” says Michael Bohan, senior director of Microsoft’s Human Factors Engineering group, who oversaw the project.

Microsoft isn't just identifying the problem; they're pointing to an easy remedy: taking a break in between meetings. 

The Science Behind the Break

Work used to be different. A 9-to-5 job, a desk, a chair, and maybe a few office plants. But with the rise of remote work and back-to-back video meetings, the workplace has become a battlefield of cognitive overload and stress. 

Thankfully, science is here to help us understand why a break isn't just nice – it's necessary.

1. Breaks Reset the Brain

Beta waves – those little electrical signals our brains send out – they spike with stress. But when you take a break and perhaps indulge in a bit of meditation, those beta waves calm down.

Imagine your brain as a bustling city. The traffic of thoughts and tasks builds up during meetings. Breaks are like traffic lights, allowing the mind to slow down and the traffic to clear.

2. Meditation Isn’t Just for Monks

Meditation isn't about achieving nirvana; it's about giving your brain a moment to breathe. The Microsoft study showed that when participants meditated during breaks, they could enter the next meeting with a more focused and relaxed mindset.

It's like hitting the refresh button on your brain's browser. Everything loads faster and works better.

3. The Tricky Transition Between Meetings

Switching from one meeting to the next without a break is like trying to change lanes in a speeding car. Stress levels spike, and focus plummets.

The science? Beta wave activity. It jumps when you move between meetings without a break. Add in some meditation, and that spike levels out.

In other words, slow down before you switch lanes.

4. The Ripple Effect of Mindful Breaks

This isn't just about one study or one set of meetings. It's about creating a work culture that respects the brain's need to reset.

The science behind taking breaks goes beyond just reducing stress. It's about promoting a state of mental well-being that can last a lifetime. It's about recognizing that our brains need downtime, just like our bodies.

The results? 

The results were fascinating, with three main takeaways:

The Microsoft study was no mere surface-level glance at meeting fatigue; it was a scientifically rigorous investigation. Let's unpack the takeaways and see how they're backed by the cold, hard data.

1. Breaks Reduce Stress Buildup

What Your Brain Says About Virtual Meetings and Why You Need Breaks
Source: Microsoft Human Factors Lab

Beta waves are like your brain's stress-o-meter. The more they build up, the more stressed you feel.

The Findings: In back-to-back meetings, beta waves increased over time, showing a cumulative buildup of stress. When participants meditated during breaks, beta activity decreased.

The Science Says: Beta waves are linked to anxiety and tension. They build up when we're engaged in tasks that demand concentration and focus. The study's evidence of breaks reducing this beta wave buildup means a real, tangible drop in stress.

2. Breaks Enhance Focus and Engagement

Frontal alpha asymmetry is a fancy term that tells us about engagement. Positive levels mean higher engagement; negative levels mean the opposite.

What Your Brain Says About Virtual Meetings and Why You Need Breaks
Microsoft Human Factors Lab

The Findings: With meditation breaks, the alpha wave levels were positive, showing better engagement. Without breaks, the levels were negative, indicating less engagement.

The Science Says: Alpha waves are associated with relaxed alertness. Meditation, even short breaks, has been shown to increase alpha waves, enhancing focus and creativity. This study provided real-world evidence of this effect in a business setting.

3. Transitions Between Meetings Spike Stress

Remember those beta waves? They also spike during transitions between calls. They're like the stress ripples in your brain, rising with each change.

The Findings: Researchers noticed that beta wave activity jumped sharply when transitioning between calls without breaks. With meditation breaks, the increase dropped.

The Science Says: This observation points to the stress induced by constantly shifting gears. Beta wave spikes during transitions align with what's known about multitasking's stressful effects on the brain. Breaks reduce this "gear-shifting" stress, leading to a more balanced mental state.

A Simpler, Smarter Way to Work

The evidence is in, and the verdict is clear: more breaks equal less stress and more productivity. It's time for a meeting revolution. With tech giants like Microsoft leading the way, the future of work looks more balanced, more focused, and more humane.

It's not just about surviving those meeting marathons anymore; it's about thriving in them. Try the change, redefine the norm, and discover a simpler, smarter way to work.

Corporate Wellbeing

The Silent Treatment: The Job Search Spiral of Ghosting

February 19, 2023
The Wellness Tribe Team
The Silent Treatment: The Job Search Spiral of Ghosting

Picture this: You’ve been searching for your dream job for months and finally found the perfect opportunity. You send in your application and wait anxiously for a response. Days turn into weeks, and your inbox remains eerily quiet. 

You start to wonder if your application was even received. You check the job posting, and it's still up, giving you hope. But as the days turn into weeks and you hear nothing back, your hope turns into frustration, anxiety, and uncertainty. You've been ghosted. Once reserved for bad dating etiquette, ghosting has infiltrated the job search process, leaving job seekers and employers trapped in a spiral of silence. 

In this article, we'll explore the negative impact of ghosting in the job search process and the reasons why it's happening. We'll also provide tips for improving communication during the hiring process and how technology can play a role in ending this frustrating trend. 

Left in Limbo

The Silent Treatment: The Job Search Spiral of Ghosting
Photo by Vlada Karpovich

The silent treatment of ghosting in the job search process is not just discourteous, but it can also have significant negative impacts. Firstly, when job seekers receive no response from potential employers, they are left feeling abandoned in the dark, wondering what they did wrong or if they are still being considered. In addition, the lack of communication can lead to frustration, anxiety, and uncertainty, making the job search process even more daunting.

Secondly, ghosting can damage an employer's reputation as potential candidates share their negative experiences with others, leading to missed opportunities for finding the right candidates. 

Lastly, the long-term impacts of ghosting can be significant for both job seekers and employers, as it can create a lack of trust and transparency in the hiring process. Therefore, it's time to acknowledge the negative impacts of ghosting and take steps to improve communication during the hiring process.

"When you ghost a candidate, you're not just losing them for this job, you're losing them for any future opportunities as well." - Jessica Merrell, Founder of Workology

Wandering Eyes

The rise of ghosting in the job search process begs the question: why is it happening? There are several potential reasons why job seekers and employers alike may be guilty of going radio silent.

Firstly, some job seekers may not be fully committed to the hiring process and may be exploring multiple opportunities at once. This can lead to disinterest in a particular role or company and a lack of motivation to follow up on the application.

On the other hand, employers may not prioritise communication with candidates or may be juggling multiple tasks and responsibilities. The result can be a lack of communication, leaving job seekers in the dark about their application status.

Another potential factor is the role of technology. With the rise of automated job search platforms and social media, communication during the job search process has become increasingly depersonalised. This can make it easier for job seekers and employers to avoid direct communication, leading to a higher likelihood of ghosting.

Regardless of the reasons behind it, the negative impact of ghosting in the job search process cannot be ignored. It's time to explore solutions for improving communication and preventing ghosting altogether.

Communication is Key

The Silent Treatment: The Job Search Spiral of Ghosting
Photo by Tima Miroshnichenko

It's clear that ghosting during the job search process is a frustrating and damaging trend for both job seekers and employers. Fortunately, there are steps that both parties can take to improve communication and prevent ghosting.

For job seekers:

  • Follow up after submitting an application to ensure it was received and express continued interest in the role.
  • Be patient and understanding but also assertive in following up on the status of the application.
  • Keep track of all applications and responses to stay organised and avoid confusion.

For employers:

  • Create a clear communication plan and stick to it, providing updates to candidates at every step of the hiring process.
  • Set realistic expectations for response time and follow through on commitments.
  • Utilise technology, such as automated responses and candidate tracking tools, to streamline communication and reduce the likelihood of ghosting.

By taking these steps, both job seekers and employers can work together to create a more positive and productive job search experience.

A Call to Action

In today's job market, ghosting has become an all-too-common occurrence. However, it doesn't have to be this way. By understanding the negative impact of ghosting and taking proactive steps to improve communication, job seekers and employers can work together to create a more positive and productive hiring process.

At the end of the day, clear communication and mutual respect are key to preventing ghosting and building strong relationships between job seekers and employers. So let's prioritise these values and put an end to the ghosting spiral once and for all.

As a corporate wellness company, we at The Wellness Tribe understand the importance of clear and respectful communication in all aspects of our lives, including the workplace. We believe that a positive and productive work environment starts with healthy communication, and we encourage employers to take the lead in preventing ghosting and creating a more positive hiring process for all.

Join the Wellness Tribe

Join The Tribe

This month we are focusing on food and how it affects your mental health. Join us as we bring in the most relevant interesting content from across the wellness segment.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.