Understanding HRA Allocation: Is It Worth It for Homeowners in Their CTC Package?

HRA and tax exemption on the total CTC

A client of mine is proposing to split 55% of the total CTC to various allowances and perks. Out of this, he is proposing to allocate 15% to HRA. He lives in his own house; therefore, I understand he needs to pay the tax on this. If this is the case, what is the benefit of declaring this sum as HRA in the first place? If he kept it as his base, would he not enjoy a higher gratuity? Please help shed some light.

Dear,

It should not be an individual choice. You should have a policy about HRA. Generally, companies keep HRA at 40-50% of the basic. However, there is no legal hitch in doing this.

Regards,
JS Malik

In that case, the parents should not be dependents of the tax assessee. They should independently assess the income received as rent. This is my opinion.