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HRA

Prakash (Lawyer) (165 Points)

27 December 2007

Hai ! Every one. H R A is Rs 6000 P.M. I need to clear about one
thing written in Salary Slip . For Tax Reimbursement It is given as
10% Excess of salary
. What does this 10% Excess of Salary means ?Total Salary is Rs
328800 P.A. Paying Rs 2500.00 as Rent . How much Reimbursement
can one get on HRA

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3 Replies

(Guest)

HRA exemption is based on three things 1. HRA Received 2. Rent in excess of 10% of basic salary 3. 40% or 50% of basic salary, on the basis of place you stay. Let me clear that, you get HRS 6K per month, you pay rent Rs. 2Kper month. So exemption will be Rs 72K per year or 40% or 50% of basic salary (say basic salary is Rs. 15K per month) i.e. 1.80L per year. so 40% of basic will be Rs. 72K or rent paid in excess of 10% of basic salary i.e. Rs. 6K (24000-10% of basic i.e. 18000). So the consulsion is 6000 HRA will be exempt per year.

CA. Amit Daga (Finance Controller CA. CS. CFA. CIFRS. M.COM. ) (9017 Points)
Replied 27 December 2007

Hi Mr.Prakash if you want the maximum benefit of HRA than you need to produce the rent bill of 1.50% of your basic pay (If you stay in any city other than metro city) 2.60% of your basic pay (If You stay in the metro city)

(Guest)

Calculation of HRA exempt and taxable 1. If you are staying in any four Metro city 50% of your salary. Otherwise 40% of your salary. 2. HRA Actually Received by you for the period during which you occupied the house. 3. The excess of Rent paid over 10% of your salary. LEAST OF THE ABOVE THREE IS EXEMPT & REST IS TAXABLE. IN YOUR CASE (On the basis of above three rule) 1 164400 2 72000 Rent paid by you 30000 3 30000 10% of ur Salary 32880 10% over ur salary means-- Govt. will allow you over 10% of your Basic+DA+Fixed % of commission based on fixed % of turnover. So, You are receiving Rs 72000/-P.A. as rent, Rs 30000/- of which is exempt and rest of Rs 42000/- is taxable as salary You will not get anything as reimbursement on HRA.