hra calculation

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This query is : Resolved

Gaurav Gupta (Querist)

06 March 2010 SIR
my salary is Rs.30000 per month and my company not paying me DA but they are paying Special allowance. Please tell me that while calculating HRA exemption should i take special allowance with my basic salary and i am paying rent of Rs 12500 per month.
My salary break up are as follows:
Basic Rs18000
HRA Rs 7200
Ta Rs3600
special allowance Rs.1200
company not deducted any pf or esi please tell my hra expemtion

CA Prashant Gupta

CA Prashant Gupta (Expert)

06 March 2010 calculation of HRA exemption:
least of following is exempt from tax
1 50% of salary if lived in Mumbai, Kolkatta, Delhi or Chennai or 40% of salary i.e.18000 in your case only basic.
2 HRA received i.e. 7200
3 excess of rent paid over 10% of salary i.e. 12500-10%of 18000= 10700

So full HRA will be exempt even if in first case you will get 40% i.e. 7200

Gaurav Gupta

Gaurav Gupta (Querist)

06 March 2010 thanks for your effort i have also thing done but some of my senior saying special allowance also included while calculating hra. because it just like incentive or commission to employee in I T develop company

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

06 March 2010 No.special allowance is not inclued for HRA exemption calculation. Commission & incentive based on fixed percentage on turnover it is included but special allowance is normal allowance not based on turnover

Gaurav Gupta

Gaurav Gupta (Querist)

18 March 2010 Thanks Sir

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