Very true and that is why it is an allowance. But in private organisations HRA is part of salary and is given to all employees just because it is excluded from the scope of wages /Salary for calculation of payments like Bonus, PF, Gratuity and leave encashment. It is also subject to deduction when an employee takes a single day's leave without pay. It is interesting that it is paid to all employees without reference to their residential status. If it is to be treated as an allowance not part of wages/ salary, it should be paid only to those reside in rented/ leased accommodation. It is not paid if the spouse is in receipt of HRA. The IT treatment also suggests that some valid rent receipt should also be furnished. Obviously, a rent receipt from a father or mother is also often submitted and is approved but it is approved knowingly and considering it as a 'vegetarian corruption'!!!