For HRA exemption under seciton 10 , least of the three is given.
1. Actual HRA received.
2. Rent paid - 10% of the salary
3.HRA Salary(40% or 50% of basic.
My question is Whether Salary includes Basic pay and DA ? In my case, i am getting HRA 3000 and rent paid is Rs.4000/- and i am thinking that entire HRA received is exempted, but my accounts manager is viewing that exemption is only for Rs.2500/(4000-10% of Basic Pay Rs.10000 and Rs.5,000DA D). Is it not 4000- 10% of Salary i.e Rs.1000(10% of BP Rs.10000/-). Whether DA will also be included, where as i am getting HRA only on Basic pay. Through light on this.
CAclubindia
