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Hra treatment

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Querist : Anonymous

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Querist : Anonymous (Querist)
08 June 2012 Sir

Please difine me how we treat HRA ( Housing Rent Allowance ) in income tax at the end of the year . How we can take benefit of HRA in income tax.

Thanks & Rgds

Mukesh Kumar
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CA Siddhartha Bhardwaj

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CA Siddhartha Bhardwaj (Expert)
08 June 2012 HRA is exempt to the extent of least of the following:

1. Actual amount received
2. Rent paid - 10% of salary
3. 40%/50% of salary
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C.A Anshul Singhal

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C.A Anshul Singhal (Expert)
08 June 2012 Salary 600000
HRA 8500

Suppose Actual Rent Paid Yearly 84000
Rule Of HRA
Lowest Of Below
50% In Metro City /40% others state 300000
Actual HRA Received 102000
Actual Rent paid -10% Of Salary 24000
Suppose Actual Rent Paid Yearly 84000
HRA Exemption 24000

Salary Included Basic Salary+DA+Commission On Fixed Percentage On Turnover

Assumed Salary Given Included basic salary +DA


Calculation

Salary 600000
HRA 102000
(8500*12)

Total Salary Income 702000
Less- Hra Exemption 24000

Net salary Income 678000
Less- 80C Deduction 100000
Less- 80D Deduction 35000

Net Income 543000

Tax 30600
Education cess 612
Secondary Higher Education cess 306

Total Tax 31518
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