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Exemption limit on salary

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This query is : Resolved

Naveen Saini (Querist)

02 May 2012 Dear Sirs,

Please help me to know that what is lower & Upper limits of exemption benefits in regards HRA & Conveyance under head "Income chargeable under head Salary".

For Example:-
As I'm Employer

My Employee Salary per month
Basic Salary : 32500
HRA 40% of B.salary : 13000
Conveyance : 4500
Total of Salary : 50000

Suppose Actual Rent paid by him Rs. 20000/month.

SO how much benefits he can take of HRA exemption?
OR
What is the maximum Limit to accept of Rent paid in actual in Rs.?

Please advise.
Naveen Saini

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

02 May 2012 HRA exemption eligible lower of following three

a) actual HRA received
b) Excess rent paid over 10% of basic salary
c) 40% of gross salary i.e basic salary

for your case

a) Rs.13,000
b) Rs.16,750(20,000-3,250)
c) Rs.13,000.

So lower of above three is option a so eligibility of HRA exemption is RS.13,000. However for your case option a and c are same and lower than other.

OM SAI SRI SAI JAI JAI SAI

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