HRA Calculation For Getting Exemption From Tax - CiteHR
Assistant Engineer, Indian Telephone Industries,
Amruta Rajput
Hr Executive

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Dear All,
Can u give me working of HRA exemption from tax?
I had search on net & but did not satisfy about the result. Please tell me the HRA % is to be calculate on salary & How it is to be get exempeted from tax the actual calcutation.
If explain with example will clear faster.
Waiting for your reply, its urgent.
Amruta Rajput :-?
Community Prime Sponsors - Payroll Software with GPS Enabled Attendance, Travel, Performance Management, HRMS. "Interactive Anywhere Learning". Executive courses from top reputed institutes like IIM, XLRI, MICA.
HRA will vary from place to place. To get maximum tax exemption one has to obtain a house rent receipt equivalent to HRA+ 10% of gross salary. In other words tax exemption towards house rent = rent - 10% of gross salary, subject to a ceiling of HRA.
For example : Rent paid - 3000 -(A)
HRA - 1000 - (B)
Gross salary - 18000 -(C)
tax exemption - (A) - (C)x10% = 3000-1800 = 1200, subject to a ceiling of (B) i.e 1000.
Hence tax exemption is 1000.
You may fix 50% of basic as HRA for metros or 40% of basic for non-metros. Regarding tax exemption, the illustration by Abbas is right. pon
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