An employed person receives HRA along with medical allowences in addition to basic and DA components. He calculates HRA exemption according to the rule: amount of rent paid in excess of 10% of salary. Now here salary is sum of basic and DA and excluding HRA, medical allowences and arrears. Is this method correct?
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Method for calculating hra exemption
Replies (3)
For HRA salary means Basic Salary+ DA+ Commission dts its..
and nothing will add other than this for calculating HRA.
D.A. is to be considered to teh extent it forms part for calculating retirement benefits of the employee. Commission is considered only if it based upon a fixed percentage.
Else only Basic needs to be considered.
But you can consieder arrears of basic and DA if the same are related to currently F.Y
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