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
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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
House Rent Allowance(HRA) 1.For Metro Cities 50% of the Basic or Basic + D.A. 2.For Non-Metro Cities 40% of Basic or Basic + D.A. Hope now its clear to you.
From India
From India
Dear All, As per my knowledge HRA cannot exceed more than 50% of Basic. Experts your views Regard’s Shaikh
From India, Bhubaneswar
From India, Bhubaneswar
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
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HRA – House Rent Allowance.pdf