HRA Calculation For Getting Exemption From Tax

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.
Thanks
Regards,
Amruta Rajput :-?

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.
Abbas.P.S

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