Understanding HRA Benefits
HRA is one of the salary components included in the compensation structure because a portion of the salary is expected to go towards accommodation. Employees can submit the HRA declaration so that the HRA component will not fall under the tax slab; however, there is an upper limit for HRA declaration.
The compensation structure for all employees across companies includes Basic salary, HRA, medical allowance, and other components. As the salary increases, the appropriate percentage increase will be distributed to the respective salary components.
Apart from HRA, other tax-saving reimbursements in the salary structure will be beneficial for those who pay taxes. For employees who do not pay taxes, there is no specific benefit.
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Thiyagu