Sec 10(13a)

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This query is : Resolved

DEEPSHIKHA AGGARWAL (Querist)

08 January 2012 hi frnz and experts..
in real lyf i came across with the situatins where companies write in offer letter of the employees that the amt qualifying for exemption under this sec is 50% of basic salary without performing any required computations under the section.. wen v calculate the same as per law then the employees argue... so i jus wanted to know whats the right procedure for calculating the limit and why is the law not followed practically????????

ca.shikha36@gmail.com

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

08 January 2012 You must be talking about a marketing company.
.
The amount out of HRA is exempt on the basis of "least" of the three, and company tells the employee the highest of the 3.
1. HRA Actually Received
2. Rent Paid- 10% of Salary
3. 50% of salary

Here Salary means :
Basic salary +DA ...forming part of retirement benefits + Commission on Turnover Basis
.

DEEPSHIKHA AGGARWAL

DEEPSHIKHA AGGARWAL (Querist)

11 January 2012 i was not talking about a marketing company sir... i was talking about an established and reputed IT company...
and u mentioned marketing co. so r there any relaxatns 4 marketing co.?
sir actually employees argue that practical applicatn of these laws r diff. n well establishd co. must b knowing better..
so there i get confused.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

11 January 2012 You need not to confuse with the term "Marketing company". By using this term I meant that generally companies make the offered package more attractive by showing
enhanced deductions which are not actually there.
.
No relaxation to a marketing co., as such, is available.

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