HRA Component of the Salary - provident fund.. CiteHR

Sharathvjil Started The Discussion:

Dear Forum Members,

We are in the process of restructuring our salary structures. Presently we have HRA component as 40% of the basic. Request you to kindly let us know, if HRA component can be fixed upto 60% of the Basic. This would help us in restructuring our salary structures.


pon1965 -  Member Since: May 2009
Hi Sharath, HRA component - 40% of basic in non-metros & 50% of basic in metros is admissible for tax exemption. Regards R.Ponraj

Shah Gaurang -  Member Since: Apr 2007
Hi Sharath,

As such there is no ceiling percentage for fixing HRA component. You can fix it at 60% of basic. However, as stated by R. Ponraj, only 40% in non-metros and 50% in metros will be considered for tax exemption. Remaining will be counted as taxable income.



Sharathvjil -  Member Since: Nov 2008
Hello Friends, Thank you all for taking time and responding to the query. This is very helpful. Thanks & Regards Sharath

Shah Gaurang -  Member Since: Apr 2007
Hello Kishan

You have asked a very open ended question. I don't think any outsider can help you calculate CTC of your employees. CTC is basically the total cost you incur on each employee and includes provident fund, esi contribution, allowances, incentives, etc. Some companies even include training cost in CTC.

So unless you provide details of what all you are spending on your employees, it is not possible to help you calculate the CTC.



grc.flor -  Member Since: Jan 2012
Hi, Can somebody send me the complete material on components of salary (definitions + formulas) along with a sample salary slip (in Excel)? Kindly send it to


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