HRA exmeption

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Ramakrishnaraju

supervisor

85 Points Posted on 03 December 2009

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.

Replies (9)

Hareesh H Sharma

Cleared IPCC..now article

867 Points Posted on 03 December 2009

For HRA salary means basic pay + DA if provided in terms of employment+ commission as % of turnover achieved by the employee

Deeps

Article Assisstant

1504 Points Posted on 03 December 2009

Salary for this purpose means basic salary, dearness allowance, if provided in terms of
employment and commission as a fixed percentage of turnover.

CA Mani

Credit Analyst

1337 Points Posted on 03 December 2009

ur manager is right, because computation of HRA is different thing ( It is governed by organisational policies) and computation of HRA exemption is different thing ( it is governed by income tax law)

CMA Ramesh Krishnan

Cost & Management Accountant

60967 Points Posted on 03 December 2009

For HRA Computation Salary means Basic pay + DA including the calculation

Hareesh H Sharma

Cleared IPCC..now article

867 Points Posted on 03 December 2009

Originally posted by :Hareesh H Sharma
"	For HRA salary means basic pay + DA if provided in terms of employment+ commission as % of turnover achieved by the employee	"

This is the definition for salary in case of exemption for HRA U/S 10(13A) of IT act

CA Trinath Galla

student

2288 Points Posted on 04 December 2009

Originally posted by :Hareesh H Sharma
"	Originally posted by :Hareesh H Sharma " For HRA salary means basic pay + DA if provided in terms of employment+ commission as % of turnover achieved by the employee " This is the definition for salary in case of exemption for HRA U/S 10(13A) of IT act	"