Dear Arun, In metro cities HRA is Max 50% of Basic & in non metros it is Max 40% of Basic.
From India, Mumbai
8From India, Mumbai
u mean HRA (allowance) or HRA (Exemption)
for exemption it is least of
1. actual HRA recd
2. 50% of basic (if in metro) / 40% of basic (if in non metro)
3. REnt paid minus 10% of basic
Basic here means Basic + DA
From India, Madras
for exemption it is least of
1. actual HRA recd
2. 50% of basic (if in metro) / 40% of basic (if in non metro)
3. REnt paid minus 10% of basic
Basic here means Basic + DA
From India, Madras
Abcdefghijklmnopqrst ifwgfweifg hfgifggr ifuhrfuirhygiur giughui rfhiurghe rguerhgerug eruigher giuhguug hghere geruugh erg geoqrug hqeuoghroguhergiuer gerg ergero gijrhoijhp4igjerq ghh ioh rth hth wt5h 5h5 jht5 hwt hrt hh w4th th rtho rthoth th rthot hothi
From India, Mumbai
From India, Mumbai
Hi,
Though there is no limit for HRA, but the same should be so fixed as to give maximum benefit to employees so far as exemption on HRA is permitted under Section 10 of Income Tax Act. The relevant provisions under IT Act, with examples are reproduced:
The minimum of the following is available as exemption from employee’s earning.
The actual HRA received from your employer
OR
The actual rent paid by you for the house, minus 10% of your salary (this includes basic + dearness allowance, if any)
OR
50% of your basic salary (if you live in a metro) or 40% of your basic salary (if you live in a non-metro)
Let us consider a hypothetical case or evaluate with an example.
Consider the Salary Components as follows:
Basic: Rs. 15,000, Dear Allowance(DA) or other allowances Rs. 5,000 and HRA: Rs. 9,000
So a total salary of Rs 29,000
Let actual rent rent paid be: Rs. 10,000
You live in Mumbai (It is a Metro in Income Tax Computation. it is a Metro otherwise too!).
Now let us understand how the rule works.
1. The actual HRA received from employer = This Amount is Rs. 9,000
2. The actual rent paid for the house minus 10% of the salary (Excluding HRA Component)
This would be Rs. 10,000 – 10% of (Rs. 15,000 + Rs. 5,000) = Rs. 10,000 – Rs. 2,000 = Rs. 8,000
3. Fifty percent 50% of your basic salary
Since you live in a metro, this would be 50% of Rs. 15,000 = Rs. 7,500
The minimum amount out of 1, 2 and 3 is Rs. 7,500. Therefore, the amount of HRA exempt from tax is Rs. 7,500 per month.
The remaining HRA amount of Rs. 1,500 (Actual HRA received Rs. 9,000 Minus exempt HRA Rs. 7,500 = Rs. 1,500) would be added to your taxable income.
From India, Gurgaon
Though there is no limit for HRA, but the same should be so fixed as to give maximum benefit to employees so far as exemption on HRA is permitted under Section 10 of Income Tax Act. The relevant provisions under IT Act, with examples are reproduced:
The minimum of the following is available as exemption from employee’s earning.
The actual HRA received from your employer
OR
The actual rent paid by you for the house, minus 10% of your salary (this includes basic + dearness allowance, if any)
OR
50% of your basic salary (if you live in a metro) or 40% of your basic salary (if you live in a non-metro)
Let us consider a hypothetical case or evaluate with an example.
Consider the Salary Components as follows:
Basic: Rs. 15,000, Dear Allowance(DA) or other allowances Rs. 5,000 and HRA: Rs. 9,000
So a total salary of Rs 29,000
Let actual rent rent paid be: Rs. 10,000
You live in Mumbai (It is a Metro in Income Tax Computation. it is a Metro otherwise too!).
Now let us understand how the rule works.
1. The actual HRA received from employer = This Amount is Rs. 9,000
2. The actual rent paid for the house minus 10% of the salary (Excluding HRA Component)
This would be Rs. 10,000 – 10% of (Rs. 15,000 + Rs. 5,000) = Rs. 10,000 – Rs. 2,000 = Rs. 8,000
3. Fifty percent 50% of your basic salary
Since you live in a metro, this would be 50% of Rs. 15,000 = Rs. 7,500
The minimum amount out of 1, 2 and 3 is Rs. 7,500. Therefore, the amount of HRA exempt from tax is Rs. 7,500 per month.
The remaining HRA amount of Rs. 1,500 (Actual HRA received Rs. 9,000 Minus exempt HRA Rs. 7,500 = Rs. 1,500) would be added to your taxable income.
From India, Gurgaon
Sir in the point 1 and point 3 wherever you mention salary or basic salary it means (BASIC PAY + DA + DPA)
So your point 3 should be 50% of 20000
Kindly refer
HRA exemption Calculation monthly , yearly basis or period basis? | SIMPLE TAX INDIA-TDS RATE INCOME TAX RATE
HRA EXEMPTION CALCULATION -HOUSE RENT ALLOWANCE 10(13A) FAQ | SIMPLE TAX INDIA-TDS RATE INCOME TAX RATE
From India, Madras
So your point 3 should be 50% of 20000
Kindly refer
HRA exemption Calculation monthly , yearly basis or period basis? | SIMPLE TAX INDIA-TDS RATE INCOME TAX RATE
HRA EXEMPTION CALCULATION -HOUSE RENT ALLOWANCE 10(13A) FAQ | SIMPLE TAX INDIA-TDS RATE INCOME TAX RATE
From India, Madras
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
HRA – House Rent Allowance.pdf