House Rent Allowance in Bangalore: What's the Minimum Limit for Private Companies?

The correct and revised paragraph with spelling, grammar, and punctuation errors fixed is:

"What is the minimum limit of House Rent Allowance in private companies in Bangalore? The maximum is 50% in urban areas and 40% in non-urban areas. Am I right?"

Hi,

There is no concept of Minimum HRA. If you declare HRA less than the exempted amount, then the employee, if a taxpayer, will end up paying more income tax.

Thanks Jeevarathnam, I wanted to know if there is any minimum limit set by the employer? As I am getting HRA as 11% of my basics, and I'm living in a rented house. Generally, it is 40%, so at the end of the year, I will end up paying more tax. Is there a way I can ask for more HRA by reducing the amount from my special allowances (keeping CTC the same)?

Shruti,

There are no fixed rules regarding what percentage of your basic salary should be allocated to your House Rent Allowance (HRA). It varies from company to company.

1) The actual house rent allowance received from your employer.
2) The actual house rent paid by you, minus 10% of your basic salary.
3) 50% of your basic salary if you live in a metro area, or 40% of your basic salary if you live in a non-metro area.

This minimum of the above is allowed as an income tax exemption on the house rent allowance.

Warm Regards,

Vilok Nandan

Speak to your HR if company policy permits changing the HRA vs. Special Allowance. It is always advisable, and HR/Finance should keep employees' benefits in mind before finalizing the salary structure.

Dear All,

It's almost the same question. I'm an employer setting up different pay structures for employees in Bangalore. Can I set any minimum percentage as HRA for my housekeeping employees? (Minimum wages range from 7,751 to 12K, based on profile). Housekeeping staff won't generally be earning enough to pay taxes.

My question is, can I set 7% or 8% or any minimum percentage for their HRA? I understand the maximum slabs are 40% and 50%. But my question pertains to the minimum percentage.

Thank you for the clarification.

Dear Seniors,

Presently, one employee receives a gross salary of 13000 (basic + DA = 8375, HRA = 2570, Conveyance = 1600, & Other Allowance = 455). As per the minimum wages of 2018, their basic + DA is supposed to be 14100. Can I increase Basic + DA to 14100 and set the rest of the components to zero? Is it mandatory to pay HRA?

Thanks & regards,
PJd

Hi friends,

Could you please tell me about the HRA claim process in private jobs? Can we claim it monthly from the employer if we are not coming under the tax-paying category?

Please help.