Re: Removing HRA From CTC

Hi
Just want to understand whether a company can remove HRA part from their employees salary without their consent or not?
Thanks
Ajay

No an employer cannot remove HRA from their salary. only emplyee's who has own home can be removed that with their consent and to be shown that part of pay in other allowance-special all., those who live in rent houses then HRA is applicable as per the LAW.

Dear Valbooj
No HRA is defined as statutory component in any law even for employee who has not own house hence Employer can remove the HRA from CTC with the concent of employee or without the concent of employee, if you still think HRA is mandatory component for those employee who is residing in rental then pls provide the any case law, section in which HRA is defined as statutory component if employee has not own house,
Best Regard
Devesh Chauhan

I beg to differ. There is a specific act in Maharashtra for payment of House Rent Allowance Act, which specifies the percentage.. Please go through the same and be guided

HI,
I WOULD LIKE TO ADD A CASE OF MAHARASHTRA, ON WHICH YOU ALSO CAN THROW SOME LIGHT.
IN MAHARASHTRA, HRA IS APPLICABLE ON MINIMUM 50 OR MORE EMPLOYEES AS PER MAHARASHTRA WORKMENS' MINIMUM HOUSE RENT ALLOWANCE ACT, 1983.
BEST REGARDS,
SUSHEEL SONEJI

Dear All
No Salary Components or any terms of appointment either service condition or pay components may be withdrawn unless it must be communicated to concerned set of workers and get it done by only mutual aggrements and consented otherwise it may lead and created to industrial disputes.

Dear memebr,
HRA is mandatory in CTC where it is part of the Minimum Wages Structure otherwise can be avoided.
However, the other major point is that if HRA will not reflected in Salary, the "HRA Exemption" can't be taken upto maximum permissible limit for computing the Income Tax.
If HRA is not part of CTC, still exemption can be taken, but that is restricted to some amount (may be 60 k per annum).
(For more detail pls refer to HRA exemption of IT Act).
Since, PF is not applicable on HRA, so it is advisable to show it in Salary structure.
Experience member can correct me.

Dear All,
Pan Singh is absolutely right. There are States like Maharashtra, West Bengal & may be any other States (I have no idea) where House Rent Allowance Act is applicable. In case of WB it is minimum 5% of Basic & DA. Therefore, it is unavoidable in those States. Moreover, for higher bracket salaried employees as per IT Act there is scope for good exemption who are residing at rental house. HRA is also exempted from PF. Under Minimum Wages Act HRA is also a component.
Considering all above factors, it is always better to have HRA as a component of CTC. There are MNCs today where for management staff, the salary structure is only Basic & HRA - no other component. We should remember that CTC structure approach may be - compliance of law as well as convenient to employees without any additional cost to employer.
Thanks & regards,
S K Bandyopadhyay
USD HR Solutions
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Salary/ wages can not be reduced from total agreed amount. HRA or any component of CTC can not be legally reduced or removed.Letter of appointment, wage settlement or practice of making HRA payment all in favour of employees that shall entail your action for claim of ten times penalty also with recovery of money as earned wages.
Assume if it is doable, then how anybody can live and protect family and oneself from others keeping wealth ?
Regds,
RDS Yadav
LABOUR LAW ADVISOR
navtaranghrs@gmail.com