Excemption under section 10 tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 September 2012
I want to know how to calculate undere section 10 [40% of (Basic+DA) or HRA Rcvd (lower Amt.)] with example

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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18 September 2012 Under section 10(13A) HRA exemption available lower of the three below.

1) Excess rent paid over 10% of salary.
2) 40% of the salary. (50% in case employment at Mumbai,Calcutta, Delhi & Chennai)
3) Actual HRA received.

Note: Salary means Basic+DA.

For your understanding following example.

Assume Basic salary is Rs.12500 p.m and DA is Rs.1500 pm and HRA is Rs.1800 p.m and actual rent paid by the employee is Rs.2500 p.m. Now HRA eligibility computation.

1) excess of rent paid over 10% of salary
2500-1400[(12500+1500)*10%]{i.e 10% of Basic+DA) = 1100
2) 40% of salary
(12500+1500)*40% = 5600
3) Actual HRA received = Rs.1800(given)

So lower of above three is 1 i.e Rs.1100 eligible for HRA exemption u/s10(13A).

Assumption: Employment is at the the city other than Mumbai,Calcutta,Delhi & Chennai.

Note: Salary also includes Commission if any paid by the employer to employee.

OM SAI SRI SAI JAI JAI SAI

Amol S Joglekar

Amol S Joglekar (Expert)
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18 September 2012 Do not forget to read the WORDS, IF TERMS OF EMPLOYMENT SO PROVIDE. (In most of the cases like banks, Govt, private employers..... only BASIC stands for calculating HRA exemption.)

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