Hra

This query is : Resolved

vivek (Querist)
Follow

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

Ajay Mishra (Expert)
Follow

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.

vivek

vivek (Querist)
Follow

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.?

Ajay Mishra

Ajay Mishra (Expert)
Follow

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

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Richa Bajoria

Pavithra Doss

Dhananjay Patil

Raviraj ponkshe

CA Saurabh Jadhav

Subscribe Now

Hra

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

GST CONSULTANT

Manager- Finance and Compliance

Accountant

Article Assistant

CA Final

GST CONSULTANCY