Can I Calculate HRA and Conveyance from Gross Salary or Just the Basic?

Deepthee
Hi all, can I calculate the HRA and Conveyance from the gross salary? I heard that both should be calculated based on the Basic only. Kindly let me know ASAP.
mail8013
HRA can be computed on Basic (as it becomes easy to calculate its impact on income tax), whereas conveyance should be kept independent of Basic. Conveyance of INR 9,600/- is exempted from income tax, and this has been raised in the current budget to INR 19,200/-. So the conveyance amount should be kept fixed at 9,600 or 19,200 so that your employees can avail the maximum benefit regarding income tax.

Regards,
A.B.
fc.vadodara@nidrahotels.com
There is no hard and fast rule that HRA and conveyance can only be calculated based on Basic. The calculation pattern/formula is 50% of Basic for Metros and 40% for Non-Metros can be taken as HRA as a maximum. Regarding conveyance, the maximum tax exemption limit is Rs. 9,600/- per annum for the financial year 2014-15.
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