Hi,
HRA is calculating on Basic not Gross, and HRA should be 40% or 50% of Metro and non- metro cities
Please go with HRA Rules
House Rent Allowance (HRA) is best tax saving tools available to employees. With these you can save upto 50% of your salary if you reside in Metro (40% of your salary if you reside in non-metro).
As per income Tax act, for calculation House rent allowance least of the following is available as deduction :
Actual HRA received
50% / 40%(metro / non-metro) of basic ‘salary’
Rent paid minus 10% of ‘salary’. Basic Salary for this purpose is basic+ DA forming part+ commission on sale on fixed rate.
Cities Like, Delhi, Mumbai, Chennai and Kolkata constitutes Metro. All cities other than these are non-Metro. So if you resides in cites like Gurgaon, Faridabad, Bangalore, Hyderabad, etc it would constitutes as Non metro and only 40% deduction will be allowed.
- See more at:
House Rent Allowance (HRA) calculation and exemption rules for Delhi,Faridabad, Gurgaon and Noida | TaxDost.com