HRA exemption

It is same for all types and classes of employees.

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 + Percentage based commission of turnover ]

An employee can claim exemption on his House Rent Allowance (HRA) under the Income Tax Act if he stays in a rented house and is in receipt of HRA from his employer. In order to claim the deduction, an employee must actually pay rent for the house which he occupies.

A HRA is exempt under section 10(13A) up to, which is least of the following: –

Actual HRA received

40% of salary (50% of the salary if the rented property is in Metro City i.e. Mumbai, Delhi, Chennai or Kolkata)

Actual rent paid less 10% of salary.

In among these criteria, if actual rent paid minus 10% of salary calculations are in negative terms.
What will we do to avail HRA exemption.??

If Actual rent paid minus 10% of salary calculations are in negative terms than You can not claim any amount of HRA as exemption, as the condition for exemption is whichever is least from 3 criteria.