Deepthi - Reagrding HRA And Conveyance

Hi All,
can i calculate the HRA and Conveyance from gross salary?
I heard that both should calculate on Basic only. kindly let me know ASAP.

Deepthee,
HRA can be computed on Basic (as it becomes easy to calculate it's impact on income tax), whereas conveyance should be kept independent of Basic. Conveyance of INR 9600/- is exempted from income tax and this has been raised in the current budget to INR 19200/-. So the conveyance amount should be kept fixed at 9600 or 19200 so that your employees can avail maximum benefit with regard to income tax.
Regard,
A.B.

There is no hard and fast rule that HRA and conveyance can be calculated only on Basic. The calculation pattern/formula is 50% of Basic for Metros and 40% for Non Metros can be taken as HRA as maximum. With regards to conveyance the maximum tax exemption limit is Rs. 9600/- p.a. for the F.Y. 2014-15