Dear All, Can anyone help me in understanding the HRA calculation? How much percent of HRA is exempt from Tax calculation. Regards, Gayatri
From India, Thana
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1From India, Thana
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Hi,
The actual HRA you will be entitled to will be the least of the following:
- The actual amount of HRA received.
- 40% of salary. This increases to 50% if you are renting out the house in Delhi, Mumbai, Chennai, or Kolkata.
- Rent paid minus 10% of salary (basic component + dearness allowance).
The HRA that does not get exempted is taxed.
For example:
Assumptions:
HRA per month = Rs 15,000
Basic monthly salary = Rs 30,000
Dearness Allowance = Nil
Monthly rent = Rs 12,000
Rental accommodation is in Mumbai.
Exemption:
- Actual amount of HRA = Rs 15,000
- 50% of salary = 50% x (30,000 + 0) = Rs 15,000
- Actual rent paid - 10% of salary = Rs 12,000 - [10% of (30,000 + 0)] = 12,000 - 3,000 = Rs 9,000
Rs 9,000, being the least of the three amounts, will be the exemption from HRA. The balance HRA of Rs 6,000 (15,000 - Rs 9,000) is taxable.
From India, Hyderabad
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The actual HRA you will be entitled to will be the least of the following:
- The actual amount of HRA received.
- 40% of salary. This increases to 50% if you are renting out the house in Delhi, Mumbai, Chennai, or Kolkata.
- Rent paid minus 10% of salary (basic component + dearness allowance).
The HRA that does not get exempted is taxed.
For example:
Assumptions:
HRA per month = Rs 15,000
Basic monthly salary = Rs 30,000
Dearness Allowance = Nil
Monthly rent = Rs 12,000
Rental accommodation is in Mumbai.
Exemption:
- Actual amount of HRA = Rs 15,000
- 50% of salary = 50% x (30,000 + 0) = Rs 15,000
- Actual rent paid - 10% of salary = Rs 12,000 - [10% of (30,000 + 0)] = 12,000 - 3,000 = Rs 9,000
Rs 9,000, being the least of the three amounts, will be the exemption from HRA. The balance HRA of Rs 6,000 (15,000 - Rs 9,000) is taxable.
From India, Hyderabad
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Dear Indu, You need to first register your self to the CiteHR, after you get login using your login and password, you will get the option to post new question below all post. Regards, Gayatri
From India, Thana
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From India, Thana
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Dear All Pls forward me the contact numbers of traning institutes or consultants for the pratical knowledge of ESI/PF/TDS etc. Thanking you. Regards Pragati
From India, Gurgaon
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From India, Gurgaon
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Dear All,
My salary is 30,000 per month, and I am paying 4,000 rent per month. Our company doesn't provide HRA, TA, or DA; instead, it offers a straight salary of 30,000. How will my tax benefits be calculated for HRA?
Thanks
From India, Panaji
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My salary is 30,000 per month, and I am paying 4,000 rent per month. Our company doesn't provide HRA, TA, or DA; instead, it offers a straight salary of 30,000. How will my tax benefits be calculated for HRA?
Thanks
From India, Panaji
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Hi Gayatri,
HRA is maximum up to 50% of Basic in metros and 40% in non-metros. An illustration: Your Basic - 10,000 In metros, HRA allowed - 5000. Tax exempted = Rs. 5000 (or actual rent paid, whichever is lower) minus 10% of your basic, i.e. Rs. 4000 per month is tax exempted (or actual rent paid minus 10% of basic if the rent is less than HRA permissible).
Similarly, HRA exemption applies for non-metros. Hope this clears your doubt.
Regards, R. Ponraj
From India, Lucknow
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HRA is maximum up to 50% of Basic in metros and 40% in non-metros. An illustration: Your Basic - 10,000 In metros, HRA allowed - 5000. Tax exempted = Rs. 5000 (or actual rent paid, whichever is lower) minus 10% of your basic, i.e. Rs. 4000 per month is tax exempted (or actual rent paid minus 10% of basic if the rent is less than HRA permissible).
Similarly, HRA exemption applies for non-metros. Hope this clears your doubt.
Regards, R. Ponraj
From India, Lucknow
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