Dear All,
Can you give me the working of HRA exemption from tax? I searched on the internet but was not satisfied with the results. Please inform me how the HRA percentage is calculated on the salary and how it is exempted from tax in the actual calculation. If you explain with an example, it will be clearer and faster.
I am waiting for your reply; it is urgent.
Thanks and Regards,
Amruta Rajput
From India, Pune
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2Can you give me the working of HRA exemption from tax? I searched on the internet but was not satisfied with the results. Please inform me how the HRA percentage is calculated on the salary and how it is exempted from tax in the actual calculation. If you explain with an example, it will be clearer and faster.
I am waiting for your reply; it is urgent.
Thanks and Regards,
Amruta Rajput
From India, Pune
Acknowledge(0)Amend(0)
HRA will vary from place to place. To get maximum tax exemption, one has to obtain a house rent receipt equivalent to HRA + 10% of gross salary. In other words, tax exemption towards house rent = rent - 10% of gross salary, subject to a ceiling of HRA.
For example:
Rent paid - 3000 -(A)
HRA - 1000 - (B)
Gross salary - 18000 -(C)
Tax exemption - (A) - (C) x 10% = 3000 - 1800 = 1200, subject to a ceiling of (B) i.e., 1000. Hence, tax exemption is 1000.
Abbas.P.S
From India, Bangalore
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For example:
Rent paid - 3000 -(A)
HRA - 1000 - (B)
Gross salary - 18000 -(C)
Tax exemption - (A) - (C) x 10% = 3000 - 1800 = 1200, subject to a ceiling of (B) i.e., 1000. Hence, tax exemption is 1000.
Abbas.P.S
From India, Bangalore
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Exemption on Salary Components.doc
SALARY SHEET CALCULATION.xls