Senior Audit Assistant

Anirudh stays in New Delhi. His basic salary is ` 10,000 p.m., D.A. (60% of which forms part of
pay) is 6,000 p.m., HRA is ` 5,000 p.m. and he is entitled to a commission of 1% on the turnover
achieved by him. Anirudh pays a rent of ` 5,500 p.m. The turnover achieved by him during the
current year is 12 lakhs. The amount of HRA exempt under section 10(13A) is –

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Chartered Accountant in Practice

 

Least of :

60,000 ( HRA Received )

Rs 45600 ( ie , 10% salary Less Rent Paid )

Rs 102000 ( 50% of Salary )

 

Therefore Rs 45600 will be allowed

 


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Asst Mgr-Finance

actual hra 5000*12=60000

rent paid -10% salary

5500*12-(204000)=66000-204000=0

50% salary =102000

ENTIRE HRA RECEIVED RS60000 is taxable

 

 

 
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Asst Mgr-Finance

Mr Karthik  salary for 10(13A) is basic plus DA PLUS COMMISSION ON TURNOVER

 
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Chartered Accountant in Practice

Mr. Sivaram sir , you have reduced entire salary from the HRA received. It is Excess of rent paid over 10% of salary.

Therefore 10% of salary would be Rs 20400

Excess would be 5500 * 12 , ie , 66000 - 20400 = 45600


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Asst Mgr-Finance

oh thanks Mr Karthik  

 
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student

Kartik you are right

 
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ACCOUNTS & FINANCE OFFICER

Mr. Karthick is right.
 
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Accounts Professional

Calculation of HRA deduction under Section 10(13a): A. HRA =5000*12= 60000 B. Rent Paid exceeds 1/10 of Salary* = 66000-19200=46800 C. Amount equal to 1/2 of Salary = 192000/2= 96000 The lowest amount is 46800/-. Hence Deductible amount is 46,800/- *Meaning of Salary as stated in clause (h) of rule 2 of Part A of the Fourth Schedule ="salary" includes dearness allowance, if the terms of employment provide, but excludes all other allowances and perquisites. So here Commission will not be included in Salary to calculate Deduction of HRA
 
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