My friend works in a Karnataka state government corporation. She gets HRA component of just 8% of Basic pay. Her office is in a city of less than 5 lakh population. Say if basic is 30000, DA is 11000, HRA is just about 2500. Is this valid amount? Can we claim more exemption?
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HRA is 8% of Basic
Replies (5)
Quick Summary
Yes, This is valid.
For HRA no more specific percentage of pay. In Salary Component BASIC & DA is must. All others by employer's deal...
For HRA no more specific percentage of pay. In Salary Component BASIC & DA is must. All others by employer's deal...
For HRA exemption lower of the following
1. Actual HRA received
2. Rent paid - 10% of Salary (Basic + DA)
3. 40% of salary
1. Actual HRA received
2. Rent paid - 10% of Salary (Basic + DA)
3. 40% of salary
HRA EXEMPTION IS GUIDED BY SEC 10(13A ) RULE 2A .
T
T
Agreed
HRA exemption with low HRA:
• HRA exemption (old regime) is the least of: actual HRA received; rent paid minus 10% of salary (basic + DA); 40% of salary (non-metro) or 50% (metro). With HRA at only 8% of basic, the exemption is capped at the HRA received (the lowest).
• So the exemption is small. If HRA is low, the remaining rent paid gives no further deduction (80GG isn't available if you receive HRA).
• Nothing to optimise unless salary structure changes.
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