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Calculation of hra exemption

zankhana Trivedi (Company Secretary) (462 Points)

17 April 2012

Dear All,

Can anyone guide me for HRA exemption.

Rent Paid: Rs. 8000/- Pm

Actual HRA received Rs. 6240/- pm

Basic Salary: Rs. 15600/- pm

DA: NIL

Rent has commenced from 01/06/2011. Can anyone guide me for HRA exemption for the FY 2011-2012.

Basic Salry increased from Rs. 15600/- to Rs. 18600/- from 01/01/2012.

Thanks & Regards

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12 Replies

CA Saiyum khan (Practicing CA) (685 Points)
Replied 17 April 2012

Exemptions will be minimum of following

Actual HRA

Rent Paid in Excess of 10% of Basic

40% of Basic

In Your case the computation would be as follows; It is assumed that HRA remain unchanged.

Particulars	Apr-May	Jun-DEC	Jan-Mar	Total
Basic	31200	109200	55800	196200
40% of Basic	12480	43680	22320	78480
10% of Basic	3120	10920	5580	19620
HRA	12480	43680	18720	74880
Rent Paid	0	56000	24000	80000
Rent Paid in Excess of 10%	0	45080	18420	63500
HRA Exempt	0	43680	18420	62100

zankhana Trivedi (Company Secretary) (462 Points)
Replied 17 April 2012

Thanks Mr. Khan.

Can u please let me know which forms part of Salary for calculation of 40% & 10% of Salary. Is it Basic+DA or any other also forms part of it?

Thanks & Regards

(Guest)

What is the exemption available under Income tax act in relation to HRA?

A part of HRA is exempted u/s 10(13A) of Income Tax Act, 1961. The amount of exemption is taken to be the least of following three amounts: Amount of HRA received. Excess of Rent paid over 10% of Salary 50% of Salary, in case the employee resides in metro cities. otherwise 40% of salary

What is meant by Salary for the purpose of HRA? Salary means Basic Salary + Dearness Allowance + Commission which is based on turnover acheived.

This is what I calculated:

HRA received 62400

Less: exemption as per 10(13A)(whichever is least)

i. Total HRA recd.. 6240*10=62400 -----------A

Hra paid excess of 10% of salary..

ii. salary.. 15600*7= 109200

18600*3 = 55800

Total salary = 165000

10% of salary = 16500

HRA = 62400

HRA excess of 10% salary = 45900 -------B

iii. 50% of basic salary = 165000*50%

= 82500-----------------C -45900

-----------

Taxable HRA 16500

Kindly correct, if I am wrong...

(Guest)

.I still have doubt, whether Total HRA recd is 62400(for 10 months) or 74880( for 12 months)... please clarify my doubt

may be, this one is right!!

HRA received 6240*12 74880

Less: exemption as per 10(13A)(whichever is least)

i. Total HRA recd.. 6240*12=74880 -----------A

ii. Hra paid excess of 10% of salary..

salary.. 15600*7= 109200

18600*3 = 55800

Total salary = 165000

10% of salary = 16500

Rent paid 8000*10 = 80000

Rent excess of 10% salary = 63500 -------B

iii. 50% of basic salary = 165000*50%

= 82500-----------------C -63500

-----------

Taxable HRA 11380

DIBYENDU (SERVICE) (266 Points)
Replied 17 April 2012

Calcuation of Salary the following component will came

1. Basic Salary

2. D.A. (If it is provided within the terms of Employment)

3. Commission (on a fixed persentage of Ternover)

DIBYENDU (SERVICE) (266 Points)
Replied 17 April 2012

Calculation of HRA

1. Basic Salary = Rs. 15600 X 9 manths (i.e. from 01.04.2011 to 31.12.2011) & Rs. 18600 X 3 manths (i.e. from 01.01.2012 to 31.03.2012) =Rs. 1,96,200.00

2. HRA compnent =Rs.6240 X 12 manths (Assume HRA unchanged on the Salary Increment)= Rs. 74880.00

3.Rent Paid =8000 pm X 10 manths (i.e. from 01.06.2011 to 31.03.2012)= Rs. 80000.00

least of the Sume will be deduct u/s 10(13A) rule 2A

1. Actual HRA Receive = Rs. 74880.00 (Rs. 6240.00 X 12 manths)

2.Rent paid over 10% of Salary =Rs. 80000- (10% of Rs. 196200) =Rs. 60380.00

3. 50% of Rs. 196200.00 =Rs. 98100.00 (reside metro) or 40% of Rs. 196200.00=78480.00 (reside non-metro)

least of above sum Rs. 60380.00 will be deduct (i.e. Rs. 5031.00 pm)

manoj (acct) (26 Points)
Replied 18 April 2012

What is right amount of HRA among all the replies received here?

rakshita (Ca final student) (84 Points)
Replied 18 April 2012

hi these are my notes regarding HRA exemption hope it would help you thanking you, raksh*ta.

Attached File : 781813 967036 hra ppt.ppt downloaded: 365 times

rakshita (Ca final student) (84 Points)
Replied 18 April 2012

hi harini,

the exemption will be for 10 months only since he did not recieve any HRA during first two months therefore no HRA no exemption.

secondly, the salary to be calculated will be in different sections ie. from june to dec and then jan to march because there is an increment from jan. so salary would be calculated separately for calculating 10% and 50% of salary from jun to dec and jan to march.

total exemption is 62100.

rakshita (Ca final student) (84 Points)
Replied 18 April 2012

sorry its HRA recieved for whole year but since rent is paid from june it means for first two months rent paid is zero hence minimum limit of exemption will b zero as in second condition is rent paid - 10% of salary. thus no exemption for first two months.