HRA IN INCOME TAX

Least of following conditions is exempted from incme tax:

1. 40% of salary (50% of salary in case of metropolitian city)
2. HRA received
3. Excess of rent paid over 10% of salary

Here salary= basic+ dearness allowance for retirement benefits+ commission based on fixed percentage of turnover.

Least of three above is exempt from tax.

HRA taxable = Total HRA received- Exempt (calculated above)..