Understanding HRA: Can Employers Set a Higher Percentage for Non-Metro Cities?

Hello Experts,

Actually, I have a query regarding HRA calculation. Is there a fixed percentage for HRA, or should I consider 40% for a non-metropolitan city? As HRA is excluded from PF, can an employer set a higher percentage for HRA?

Answer is simply "no". Up to 15,000/- Basic, it should not be more than 25% (approximately) of the monthly gross, and it is better to keep the monthly gross restricted to only two components - Basic & HRA. Please read the Supreme Court Verdict on PF Gross in February 2019 and the definition of wage (yet to be implemented) from the Wage Code.

S K Bandyopadhyay (Howrah, WB)

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