HRA Exemption [Thread 420381]

Dear Experts
Please let me know about the HRA Exemption in such cases. When Employees are given HRA from employer into their salary and other hand it is deducted from their salary for those who are availing residential quarters provided by the company township. In such case HRA should be calculated as income or not.
Regards,
S.Shah

Dear Shah,
I am slightly confued with your query.
Condition-1: If the employees are enjoying company provided accomodation absolutely free then their HRA is taxable.
Condition-2: If the employees are paying certain amout then the actual amount is considered as non taxable.
Please find below the general rule:
House Rent Allowance (HRA): Rent receipts can be shown for taking tax benefit for living in a rented house. Income tax exemption for HRA will be least of following:
1. The actual amount of HRA received as a part of salary.
2. 40% (if living in non-metro area) or 50% (if living in metro area) of (basic salary+Dearness allowance (DA)).
3. Rent paid minus 10% of (basic salary+DA).
In some cases, deduction for both HRA and home loan interest (u/s 24) can be taken together in case owned house is not in same city or not at a commutable distance to office.
For further clarification feel free to discuss or write.

Dear Mitraji,
Thank you for knowing me general rule for HRA Income Tax Exemption.
Still I am sightly confused in below mentioned such case.
Employees are receiving HRA as earning head from employer and same HRA are deducting as deduction head for those employees who are enjoying company provided accomodation. both are mentioned into their salary slip. Hence, HRA is also calculated in gross salary. actually employee are not receiving HRA amount from employer. in this case, Should HRA be calculated as income or not?
Regards,
S.Shah

Dear Shah,
As they are getting the HRA it will be considered as income.
But since they are paying "rent" for accomodation it will be considered it as non-taxable as per the rule.
For any further clarification feel free to write or discuss.