Understanding HRA: How Is It Calculated on Basic Salary in CTC According to the Act?

subhra500
What is the percentage of calculation of House Rent Allowance (HRA) on basic salary in Cost to Company (CTC) as per the act?

Thank you.
saswatabanerjee
Understanding CTC and HRA

CTC (Cost to Company) is essentially a term that HR created to give candidates and employees the impression that they are paid more than they actually receive. The term is not recognized in any labor law in India and is not defined anywhere. Therefore, you are free to choose what percentage you wish to have.

However, please check the income tax requirements on HRA as it will affect the amount of tax paid by the employee. Generally, people consider between 30% and 45% of Gross as HRA.
If you are knowledgeable about any fact, resource or experience related to this topic - please add your views. For articles and copyrighted material please only cite the original source link. Each contribution will make this page a resource useful for everyone. Join To Contribute