House rent allowance

Note that Our Company  situated in Metro City. Please tell us can we paid 37% HRA(House Rent Allowance)    on Basic Salary or  paid 50 % on basic salary 

Replies (4)

The actual HRA offered will be the lowest of the following three provisions:

  • The amount received as the HRA from the employer.
  • Actual rent paid less 10% of the basic salary.
  • 50% of the basic salary if staying in a metro city and 40% in a non-metro city.
  • Salary means Basic+Fixed commission of turnover+DA.

better u take 50% of Basic...

If we shown  HRA 37% on Basic Salary then it is wong as per income tax act or.................

i think its ok.. 

 

For calculation of Income Tax of Employee please follow this rule

The deduction available is the least of the following amounts:

a. Actual HRA received;

b. 50% of [basic salary + DA] for those living in metro cities (40% for non-metros); or

c. Actual rent paid less 10% of basic salary + DA

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