Planning to move to a new city or state in India? You might be wondering how to manage your finances and taxes. You might have heard of terms like relocation allowance and house rent allowance (HRA), but do you know what they mean and how they affect your income tax? Here, we will explain the difference between relocation allowance and HRA and help you decide which one is right for you.

 

What is Relocation Allowance?

A relocation allowance is a lump sum amount that your employer pays you when you relocate to a new place for work purposes. It is meant to cover the expenses of moving your household goods, travel, accommodation, and other incidental costs. Relocation allowance is also known as transfer allowance or shifting allowance.

Relocation allowance is taxable under the head “Income from Salary” in your income tax return. However, you can claim an exemption for some of the expenses that you incur while relocating, such as:

–        Packing and transportation of household goods

–        Travel expenses for yourself and your family

–        Hotel accommodation for up to 15 days

–        Brokerage or commission for finding a new house

To claim exemption, you need to submit the bills or receipts of these expenses to your employer. The amount of exemption cannot exceed the actual amount spent or the relocation allowance received, whichever is lower.

 

What is HRA?

HRA is a component of your salary that your employer pays you to meet the cost of renting a house in the city where you work. HRA is also known as rent allowance or house rent reimbursement.

HRA is partially exempt from tax under Section 10(13A) of the Income Tax Act, 1961. The amount of exemption depends on four factors:

–        The actual amount of HRA received

–        The actual rent paid

–        10% of your basic salary

–        50% of your basic salary if you live in a metro city or 40% if you live in a non-metro city

The last of these four factors is the amount of exemption that you can claim. To claim exemption, you need to submit the rent receipts or rent agreement to your employer.

 

Which is Right for You?

The answer to this question depends on your personal and professional situation. Here are some points to consider:

–        If you are moving to a new city or state permanently or for a long duration, you might prefer to claim HRA as it will reduce your taxable income every month.

–        If you are moving to a new city or state temporarily or for a short duration, you might prefer to claim a relocation allowance as it will help you cover the one-time expenses of shifting.

–        If you are moving to a city or state with high rent, you might benefit more from HRA as it will give you a higher exemption.

–        If you are moving to a city or state where the rent is low, you might benefit more from a relocation allowance as it will give you a higher lump sum amount.

Whatever option you choose, make sure to keep all the relevant documents and receipts handy for tax purposes. Also, consult your employer and a tax expert before making any decision.

 

How to Find Reliable Packers and Movers in India?

One of the significant challenges of relocating is finding reliable packers and movers who can handle your belongings with care and professionalism. There are many packers and movers in India, but not all of them are trustworthy and efficient.

To find reliable packers and movers in India, you can follow these tips:

–        Ask for recommendations from your friends, relatives, colleagues, or online forums who have used packers and movers services before.

–        Check the reviews and ratings of packers and movers on websites like Justdial, Sulekha, Urban Clap, etc.

–        Compare the quotations and services offered by different packers and movers. Look for hidden charges, insurance coverage, transit time, etc.

–        Verify the credentials and registration of packers and movers. Check their GST number, PAN card, address proof, etc.

–        Visit their office or warehouse personally and inspect their equipment and staff.

–        Avoid paying the full amount in advance. Pay only after the delivery of goods and satisfaction with the service.

 

 

By following these tips, you can find reliable packers and movers in India who can make your domestic relocation smooth and hassle-free.