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In most of the cases ,House Rent Allowance(HRA) is part of salary package .so exemption of Hra how to calculated is most of us is want to know infact most of person already know about HRA exemption,I am giving this to shares my understanding on the above issue which may be useful for many of this site visitors.if you have any different views or any point left in this post ,please record in the comment section.
calculation of HRA exemption.

• least of following three will be exempted
1. Hra received
2. 50% of salary in case of residential accommodation taken on rent is situated in Bombay ,Calcutta ,Delhi, or Madras (Chennai) and 40 % of salary in in any other case.
3. rent paid in excess of 10 % of salary

other points to be noted
1. Salary for this purpose mean
1. Basic salary
2. Dearness Allowance if terms of employment so provides.
3. commission based on a fixed percentage of trunover.
4. all other allowances and perquisites is to be excluded.

2. Salary related to period of rent should only be considered on due basic .
3. Salary received in period as advance or arrear not related to calculation period should not be included.
4. For calculating 40/50 % as per point 2 above place of residential accommodation is important ,not where the person is working.suppose Rajiv taken a house in Delhi on rent but has working in Rohtak than he is eligible as per point 2 upto 50 % as house is situated in Delhi.
5. The calculation should be done on separately(monthly) if salary or HRA has varies during the year.
6. No,Hra exemtion if House rent paid is less than 10 % of salary.
7. Again exemption is denied where an employee lives in his own house, or in a house for which he has not paid any rent.

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