Dear Professionals, Can HRA be more than the basic salary? Is it possible for us to deduct HRA more than 50% if the employee’s salary is not under the tax slab? Thank you for your help.
From India, Ahmedabad
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1From India, Ahmedabad
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It is not practically possible. Usually, HRA is a percentage of the basic salary, and even in income tax calculations, it has a relationship with the basic salary.
HRA Percentage in Relation to Basic Salary
In general, HRA ranges from 50 to 60% of the basic salary at higher salary levels and a minimum of 5% at lower levels (as per statutes in some states of India - WB HRA Act - 5%, the same as Maharashtra and some other states).
Regards, S K Bandyopadhyay (WB, Howrah) CEO USD HR Solutions [Phone Number Removed For Privacy-Reasons]
From India, New Delhi
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HRA Percentage in Relation to Basic Salary
In general, HRA ranges from 50 to 60% of the basic salary at higher salary levels and a minimum of 5% at lower levels (as per statutes in some states of India - WB HRA Act - 5%, the same as Maharashtra and some other states).
Regards, S K Bandyopadhyay (WB, Howrah) CEO USD HR Solutions [Phone Number Removed For Privacy-Reasons]
From India, New Delhi
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Gratuity - Taxation Issues.docx