Asst. General Manager - Hr
Recruitment, Labour Laws, Skill Mapping,
Hr Executive
Professional - Exectutive Hr
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Dear All,
Had a query regarding HRA. Can a company have two different HRA percentages amongst staff? The company has recently changed the HRA percentages. They have kept the HRA as it was previous for the recent joinees (less than a year in the organization) whereas they have changed the HRA for the older employees and also the new joinees. Is it acceptable?
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Yes an employer can keep different HRA rates in same establishment, once he pays more % than the min.HRA fixed by statute. In maharahstra we have House rent allowance act. According to it, an employer has to pay min.5% HRA on (Basic+da) or consolidated Basic salary. However, we have 3 different HRA % .
i think HRA depends on which type of city is it..like A class city, A 1 class city, B class city..and many more factors..
here is the small article which im sharing with you..
When you are calculating HRA for tax exemption you take into consideration four aspects which includes salary, HRA received, the actual rent paid and where you reside, i.e. if it is a metro or non-metro.
If these aspects remain constant through the year, then tax exemption is calculated as a whole annually, if this is subject to change, as in a rent hike or shift in residence etc. then it is calculated on a monthly basis.
The place of residence is significant in HRA calculation as for a metro the tax exemption for HRA is 50% of the basic salary while for non-metros it is 40% of the basic salary.
please let us know if you need any more info...or do a search in this site already there are many articles on it..
I agree with Ajay, in an organization HRA can be different for employees based on their Location. For Example a company in Gurgaon gives 40% of basic as HRA to the employee staying in Gurgaon while gives 50% of basic as HRA to the employee staying in Delhi.
But with regard to your question it should not be based on employee experience...
Hi Pratima,
The basic rule is, if basic is up to Rs. 5,000/- OR Rs. 5,000/- then HRA should be 40% of basic salary. If basic salary in more than Rs. 5,000/- then HRA should be 50% of basic salary.
Dear Sunil, Ajay,Vikas and Stepintojob. Thanks so much for the inputs. I really appreciate all the help. I did check the site before posting the question, but there werent any article on the different slabs within an organization.
Our company has just revised the percentage for HRA and the employees are all working in the same location (about 10) and employees who have joined in the last year for whom the slab is still the previous one.
The newer joinees get the revised percentage, same with the older ones, but the employees with less than a year in the organization fall in the prior slab.. It really looked uneven to me, so i posed the question.
Thanks again for the help.
yes i m sure Mr. Ajay is right HRA should be 40% on Basic+DA, and it depends on ZONE 1, ZONE 2, ZONE 3, ZONE 4. Under which zone ur organisation comes.
Can any one tell me what percentage should be fixed as a Basic salary. Is this percentage is based on CTC or any other thing. Is it staute to include HRA as a part of salary structure?
Plz reply.
Thanks in advance.
i do not think that the HRA can be differentiate on the basis of Experience .it is purely on the basic of the city where in the individual is residing.
Dear Vikas, Whose rule is this ?? State Govt./ Central Govt. ?? or any legislation ?? or your own rule ??
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