Hra calculation

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Natasha Mourya (Querist)
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21 May 2014 Hi,
I want to know, how much amount of house rent allowance Per month can an employee pay ? If his basic salary 10000 per month & received House rent allowance Rs 4500 by Employer. What is the HRA limit which an employee can pay.

Rupesh Jain

Rupesh Jain (Expert)
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21 May 2014 house rent will pay max Rs. 5000/- PM

exempt rs. 4000 As HRA

Natasha Mourya

Natasha Mourya (Querist)
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21 May 2014 It means an employee can not show more than Rs:5000 as HRA paid. Even he is paying more HRA just like 7000 per month but maximum Rs: 5000 can be taken for calculation...isn't sir..thax

Yogesh Shukla

Yogesh Shukla (Expert)
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21 May 2014 House Rent Allowance (HRA) is best tax saving tools available to employees. With these you can save upto 50% of your salary if you reside in Metro (40% of your salary if you reside in non-metro).

As per income Tax act, for calculation House rent allowance least of the following is available as deduction :

(1) Actual HRA received
(2) 50% / 40%(metro / non-metro) of basic ‘salary’
(3) Rent paid minus 10% of ‘salary’. Basic Salary for this purpose is basic+ DA forming part+ commission on sale on fixed rate.

Cities Like, Delhi, Mumbai, Chennai and Kolkata constitutes Metro. All cities other than these are non-Metro. So if you resides in cites like Gurgaon, Faridabad, Bangalore, Hyderabad, etc it would constitutes as Non metro and only 40% deduction will be allowed.

If actual rent paid is lower than 10% of your basic salary you receive no exemption. The other key point is that you cannot claim any exemption under this section if you live in your own home or if you are not paying rent to anyone.

Natasha Mourya

Natasha Mourya (Querist)
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21 May 2014 Yogesh Ji, I too know the above rules which u mentioned I just wanna know how much amount of HRA can an employee which he pay as rent...suppose he received from his employer Rs:- 5000 per month & employee pays Rs: 12000 for HRA....Can he claim Rs: 12000 or is their any maximum or minimum limit to calculate HRA.

Yogesh Shukla

Yogesh Shukla (Expert)
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21 May 2014 Dear Madam,
Minimum of these can be subject to exemption under IT Act. He/She can only claim Rs 5,000 which is minimum of these three.

Natasha Mourya

Natasha Mourya (Querist)
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23 May 2014 If HRA paid by the employee is 12000 p.m & received by his/her employer is 4500, then minimum or maximum how much amount of HRA paid by employee can show for HRA calculation....Can an employee show full amount of HRA 12000 per month if he receive 4500 by his/her employer.

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