I am working in Pvt. Ltd. company in Mumbai. For the financial year 2011-12 I had received HRA as follows :
For months Apr, May and Jun : Rs. 7467 per month.
In the month of Jul, I received HRA as Rs. 10921 and HRA arrears for the months on Apr, May and Jun as Rs. 10362.
For the rest of the months as Rs 10921 per month.
Hence for the entire year the HRA comes to 131052. For the year I paid rent of Rs. 13750 per month. (i.e. Rs 165000 for the year). I calculated the HRA exemption on yearly basis then it would come to Rs. 131052. But the payroll vendor had calculated on monthly basis, which had meant that for the months of Apr, May and Jun on Rs. 7467 per month is being considered and for other months Rs. 10921 per month which comes to Rs. 120690.
The arrears had not been spread accross the months for which arrears have been paid, instead it had been considered for the month in which arrears had been paid. Kindly advice if this is the correct practice, as the months for arrears and month in which arrear had been received are in same financial year.
CAclubindia
