Understanding HRA Exemptions: How Do You Calculate TDS Accurately?

Dear Sir,

How to calculate HRA exemptions to calculate TDS.

Regards,

Ramdas Iyer

Dear Ramdass,

HRA Exemption = Actual house rent paid - 10% of excess basic salary.

Regards,
Charvaka Reddy

Dear Ramdass,

There are three ways to calculate the HRA:

1. Actual HRA received.
2. If you are living in a metropolitan city, it should be 50% of the basic salary; otherwise, it should be 40% of the basic component of your salary.
3. If you are paying rent and you have rent receipts, you should calculate "Rent paid - 10% of basic."

Now, the HRA Exemption equals the minimum return from the above three ways of calculation.

I hope this fulfills your query.

Regards,
Sanjay Gupta
9871018121

At least 3 items are exempted:

1. Actual HRA Received
2. Rent Paid - 10% of Salary*
3. 40% or 50%** of Salary

*Salary = Basic Salary + DA (Forming part)
** 50% for Metro City (Delhi, Mumbai, Chennai, Kolkata)

Please let me know if you need any further assistance.

Dear All,

Actual HRA Received:

1. Rent Paid - 10% of Salary*
2. 40% or 50%** of Salary
* Salary = Basic Salary + DA (Forming part)
** 50% for Metro Cities (Delhi, Mumbai, Chennai, Kolkata)

Reply with Quote.

The above requirements are mandatory or depend on the company policy.

HRA:
[u/s 10(13A)]

Least of the following:
(1) 10% of Salary;
(2) Amount Actually Received;
(3) Amount if Accommodation situated in
(a) Mumbai, Delhi, Kolkata & Chennai = 50%;
(b) Other Case = 40%.

Dear Ramdass,

HRA Exemption = Actual House rent paid - 10% Excess Basic Salary.

In metro cities, HRA is 50% of Basic Salary. In non-metro cities, HRA is 40% of Basic Salary.

Regards,
Charvaka Reddy

Hi,

Kindly use the attached Excel file for HRA exemption calculation.

Hi Ramdas,

Example: HRA Received - Rs. 100/- Rent Paid By You (living in Delhi) - Rs. 150/-, Basic Salary - Rs. 250/-
Least of the following 3 is exempted:
1. Actual HRA Received: Rs. 100/-
2. Rent Paid - 10% of SAL* (Rs. 150 - 10% X Rs. 250): Rs. 125/-
3. 50% of SAL* (50% X Rs. 250): Rs. 1250/-
Among the above 3 points, No. 1 Rs. 100/- is the least.
Taxable HRA = Actual Received - Exempted (100 - 100 = 0)

One of my colleagues has a salary breakdown as follows: 25,000 basic + 12,500 HRA + 3,500 Conveyance + 2,000 medical + 2,000 mobile, totaling 45,000. How do I calculate TDS on his salary?

Actual HRA Received:

1. Rent Paid - 10% of Salary*
2. 40% or 50%** of Salary

*Salary = Basic Salary + DA (Forming part)
**50% for Metro Cities (Delhi, Mumbai, Chennai, Kolkata)

Is the above calculation true or false? Please confirm, it's urgent.

Thank you.
Regards.