Please reply me
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 September 2011
Hi Sir,
please tell me what menas by the term excess of rent paid over 10 % of salary
please tell me what menas by the term excess of rent paid over 10 % of salary
28 September 2011
It means=(Rent paid - 10% of salary)
I think you are asking for HRA Exemption.
exemption of HRA will be available up to the the minimum of the following three options:
#Actual house rent allowance received from your employer
#Actual house rent paid by you minus 10% of your basic salary
#50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro
This minimum of above is allowed as income tax exemption on house rent allowance.
I think you are asking for HRA Exemption.
exemption of HRA will be available up to the the minimum of the following three options:
#Actual house rent allowance received from your employer
#Actual house rent paid by you minus 10% of your basic salary
#50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro
This minimum of above is allowed as income tax exemption on house rent allowance.
28 September 2011
Meaning of Salary for calculation the exemption of HRA
Salary means (Basic + D.A + Commission based on fixed percentage on turnover).
Salary is to be taken on due basis in respect of the period during which the period accommodation is occupied by the employee in the previous year.
Examples for calculation of exemption/deduction of HRA
X has received following amount during the previous year.
Basic Salary – Rs. (5000*12) – Rs. 60,000/-
Dearness Allowance (D.A) – Rs. (1000*12) – Rs. 12000/-
House Rent Allowance (H.R.A.) – Rs. (2000*12) – Rs. 24000/-
Actual Rent Paid – Rs.(2000*12) – Rs. 24000/-
Calculation
The minimum of the following amount shall be exempt
Actual HRA received (2000*12) – Rs. 24000/-
Rent Paid in excess of 10% of salary ( 24000-7200) – Rs. 16800
40% of Salary – Rs. 28800/-
Therefore, Rs. 16800 shall be exempt and the balance Rs. 7200 shall be included in gross salary.
Salary means (Basic + D.A + Commission based on fixed percentage on turnover).
Salary is to be taken on due basis in respect of the period during which the period accommodation is occupied by the employee in the previous year.
Examples for calculation of exemption/deduction of HRA
X has received following amount during the previous year.
Basic Salary – Rs. (5000*12) – Rs. 60,000/-
Dearness Allowance (D.A) – Rs. (1000*12) – Rs. 12000/-
House Rent Allowance (H.R.A.) – Rs. (2000*12) – Rs. 24000/-
Actual Rent Paid – Rs.(2000*12) – Rs. 24000/-
Calculation
The minimum of the following amount shall be exempt
Actual HRA received (2000*12) – Rs. 24000/-
Rent Paid in excess of 10% of salary ( 24000-7200) – Rs. 16800
40% of Salary – Rs. 28800/-
Therefore, Rs. 16800 shall be exempt and the balance Rs. 7200 shall be included in gross salary.
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