Can anybody please explain me how to calculate rebate in income tax payable due to paying house rent as per income tax rules in India? Here is one case:
Mr XYZ receives gross salary of Rs. thirty thousand per month out of which Rs3500 is house rent allowance. He spends Rs3000 per month towards house rent. If we assume he can save income tax for further Rs one lakh (above basic RS 180000 which is not taxable) by paying life insurance premium, investing in mutual fund, PPF etc, what will be his net income tax for the year? (please indicate steps in your argument briefly.)
Also, in case the actual house rent paid is more than the HRA received, say Rs 4000 per month, then what will be the income tax payable for the financial year? Thanks.