Is there any actual HR word in HR payroll? I got this doubt when I was searching for a rent receipt for an HRA claim. If actual HRA is there, what is the percentage of that, and will it be based on gross or basic salary? Looking forward to a reply. Thank you.
From India, Hyderabad
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From India, Hyderabad
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Hi Padma There is nothing as Actual HRA. HRA is calculated 40% on the basic and there is no any strict rule of that. It is just to reduce the Income Tax of the employees.
From India, Bangalore
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653From India, Bangalore
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Dear Padma,
I think you are referring to the tax benefit paragraph of HRA. HRA is usually given by employers as 40% of basic + DA (50% for metro cities). However, there are many employers who would give you more than the statutory requirement. Actual rent is the rent that you pay to the landlord. So the tax benefit is on the minimum of the following three:
1. Actual HRA given (the amount that is paid to you and is reflected in your salary)
2. 40% (or 50%) of Basic + DA
3. Rent paid - 10% of (Basic + DA)
Regards,
From India, Mumbai
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I think you are referring to the tax benefit paragraph of HRA. HRA is usually given by employers as 40% of basic + DA (50% for metro cities). However, there are many employers who would give you more than the statutory requirement. Actual rent is the rent that you pay to the landlord. So the tax benefit is on the minimum of the following three:
1. Actual HRA given (the amount that is paid to you and is reflected in your salary)
2. 40% (or 50%) of Basic + DA
3. Rent paid - 10% of (Basic + DA)
Regards,
From India, Mumbai
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Dear Jeevarathnam ji and Dear Ankita ji,
Please note that HRA is not compulsory to pay except in some states where there is a law that obligates the employer to pay HRA under certain conditions. There is no law that compels the employer to pay HRA at 40% or 50%. Payment of HRA to employees and taking exemption by employees of this payment under Income Tax are two separate issues.
From India, Mumbai
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Please note that HRA is not compulsory to pay except in some states where there is a law that obligates the employer to pay HRA under certain conditions. There is no law that compels the employer to pay HRA at 40% or 50%. Payment of HRA to employees and taking exemption by employees of this payment under Income Tax are two separate issues.
From India, Mumbai
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Income Tax Calculation 2009-10 - Salaries.xls