Dear Senior, Please tell me what will be HRA amount for a metro city, if an employe’s Basic = Rs. 6,000/- and DA = Rs. 2000/-. Does HRA depend upon DA???
From India, Calcutta
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11From India, Calcutta
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Every employer must pay each workman employed by them a House Rent Allowance (HRA) of at least 5% of wages (Basic + DA). This rule applies to factories or establishments employing 50 or more persons, including contract laborers. If housing accommodation is provided, then HRA is not required to be paid. For further reading, please refer to the HRA Act of 1988.
Regards,
Janardan
From India, Mumbai
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Regards,
Janardan
From India, Mumbai
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Your question, though appearing simple, requires an elaborate answer encompassing all the principles of wage and salary administration. There is no hard and fast rule for the determination of any allowance, much less HRA in addition to basic wages. By the way, can you please tell me the basis for fixing the individual's basic as Rs. 6000 and D.A. as Rs. 2000? If the fixation is based on the rates of minimum wages, if any, fixed by the Government for the particular employment under the Minimum Wages Act, 1948, my answer would be very simple. If the determination is based on factors like job analysis, supply and demand of labor, organization's ability to pay, prevailing market rate, cost of living, managerial attitude, etc., the answer has to be a bit more elaborate, consuming more of your time and focusing on the concepts of cost of living and HRA with reference to the specificity of your query.
Cost of Living and Dearness Allowance
Cost of living is computed based on prevailing market prices of primary consumer goods like food grains and the like. Dearness Allowance is linked to fluctuations in the Consumer Price Index, giving rise to the concept of variable D.A. Before the emergence of D.A. as a concept, the practice of splitting up gross wages into basic and other allowances was necessitated by the Industrial Revolution, which resulted in large-scale production, the emergence of industrial centers, labor migration, and the rising bargaining power through unionization. It became an arrangement of mutual satisfaction, with the employer benefiting from lesser indirect financial commitments and the labor receiving more money wages over time.
Understanding HRA
So, my answer is that HRA is not dependent on D.A.; instead, its grant and quantum depend on factors like the location of the industry, the nature of its manufacturing or business, and the overall earnings of the workers.
From India, Salem
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Cost of Living and Dearness Allowance
Cost of living is computed based on prevailing market prices of primary consumer goods like food grains and the like. Dearness Allowance is linked to fluctuations in the Consumer Price Index, giving rise to the concept of variable D.A. Before the emergence of D.A. as a concept, the practice of splitting up gross wages into basic and other allowances was necessitated by the Industrial Revolution, which resulted in large-scale production, the emergence of industrial centers, labor migration, and the rising bargaining power through unionization. It became an arrangement of mutual satisfaction, with the employer benefiting from lesser indirect financial commitments and the labor receiving more money wages over time.
Understanding HRA
So, my answer is that HRA is not dependent on D.A.; instead, its grant and quantum depend on factors like the location of the industry, the nature of its manufacturing or business, and the overall earnings of the workers.
From India, Salem
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You may keep 50% of Basic and DA as HRA. There is no specific rule for payment of HRA. But as per Income Tax act, one of the criteria for deciding HRA rebate is 50% of (basic and DA)
From India, Madras
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From India, Madras
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