Hra
This query is : Resolved
06 September 2013
Can an employee gets HRA an amount equal to the amount of his salary? Please give the source of answer also.
Ajay Mishra
(Expert)
06 September 2013
Hi
No.
HRA Calculation
The actual HRA deduction that one can avail under Section10 (13A) would be the minimum of the following:
The actual amount of HRA received.
50% of the salary for individuals residing in metros (Delhi, Mumbai, Chennai or Kolkata) and 40% otherwise.
Rent paid minus 10% of salary (basic component + dearness allowance).
For instance an individual staying in Delhi earns a basic salary of Rs 40,000 per month and rents an apartment for Rs 18,000 per month. He receives an HRA of Rs 25,000 from his employer. His HRA deduction will be the least of the following three figures:
The actual HRA received: Rs 25,000
50% of the salary (since he is staying in a metro city) : Rs 20,000
Excess of rent paid over 10% salary: Rs 18000 - Rs 4,000 = Rs 14,000
Therefore the tax exemption will be Rs 14,000 and the net taxable HRA for the individual will be Rs 25,000 (HRA received) less Rs 14,000 (HRA deduction eligible), which will be equal to Rs 11,000.
Meanwhile if an individual stays in his own property and also gets an HRA from his employer, he will not be entitled for the HRA deduction under the Income Tax Act.
No.
HRA Calculation
The actual HRA deduction that one can avail under Section10 (13A) would be the minimum of the following:
The actual amount of HRA received.
50% of the salary for individuals residing in metros (Delhi, Mumbai, Chennai or Kolkata) and 40% otherwise.
Rent paid minus 10% of salary (basic component + dearness allowance).
For instance an individual staying in Delhi earns a basic salary of Rs 40,000 per month and rents an apartment for Rs 18,000 per month. He receives an HRA of Rs 25,000 from his employer. His HRA deduction will be the least of the following three figures:
The actual HRA received: Rs 25,000
50% of the salary (since he is staying in a metro city) : Rs 20,000
Excess of rent paid over 10% salary: Rs 18000 - Rs 4,000 = Rs 14,000
Therefore the tax exemption will be Rs 14,000 and the net taxable HRA for the individual will be Rs 25,000 (HRA received) less Rs 14,000 (HRA deduction eligible), which will be equal to Rs 11,000.
Meanwhile if an individual stays in his own property and also gets an HRA from his employer, he will not be entitled for the HRA deduction under the Income Tax Act.
06 September 2013
Thank you, but am asking that shall i give my employee an amount as HRA equal to the amount of his salary?
For example, my employee gets salary of Rs.15000 p.m. shall i give him HRA the same amount of Rs.15000 p.m.?
For example, my employee gets salary of Rs.15000 p.m. shall i give him HRA the same amount of Rs.15000 p.m.?
Ajay Mishra
(Expert)
06 September 2013
No, you can not give HRA equal to salary.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Issuing of delivery challan by seller of goods
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Taxation of crypto futures in India Fy 2026- 2027
- EPF ECR NEW RULES Sep 17th 2026
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- Tax on Amount transferred in HUF Account
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
