HRA Exemption

[Former Member]

Dear Experts

I Have googled about the HRA Exemption but was not clear  please find the  below information

the exemption of HRA will be available up to the the minimum of the following three options:

1. 1)Actual house rent allowance received from your employer
2. 2(Actual house rent paid by you minus 10% of your basic salary

         3)50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro

i was not clear could some one though a light with example

Regards

Giri

[Former Member]

Hi Giri,

Please check below link it will give you clear picture.

Thanks

Omprasad Reddy

[Former Member]

Hello,

Yes that is correct. Assume the below monthly values:

1) Actual HRA received - 5000

2) House rent paid  - 5000

3) HRA basis (basic + DA ) - 6000

So as per your formula, HRA exemption for a person residing in a metro will be minimum of:

1) 5000

2) 5000- 10% of 6000 = 5000-600= 4400

3) 6000

Hence here HRA exemption=4400 per month.

[Former Member]

Hi

1)HRA Received means 40% or 50%   of Basic????

2) What is  the actual rent paid ??? what does it mean   is it 40 or 50 % of basic

3) 50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro  this is the 1ST STEP ONLY RIGHT Pls guide me

[Former Member]

Hi Giri,

1. HRA received means actual HRA you received from employer (Refer your payslip for the HRA amount). It can be 40%or 50% or it can be any amount not always 40% or 50% of Basic (Paid by employer)

2. Actual Rent Paid is the rent that you are paying to your owner. Year end you have to submit rent receipts (Duly signed by your owner saying he has received that amount from you)

3. Yes 50% in case you are residing in Metro (Delhi, Mumbai, Chennai & Kolkata) and 40% for rest of the cities.

Least of the three will be considered for HRA Exemption

Regards

Ravi Kumar

[Former Member]

Refer to the reply posted by Ravi, this answers your queries.

[BalaAP]

Hi,

Both Ravi & Tania are correct with their examples.

You can check the HRA % by HRA wage type, how it is being calculated (like in some cases by indirect valuation % or by using a PCR. You may have to drill down the HRA wage type's detail or payroll log to get this detail).

This policy is for Employee Rented Accommodation.

There are other types of schemes available:

1) CLA - Company Leased Accommodation

2) COA - Company Owned Accommodation

3) Employee Owned Accommodation

It depends on how many schemes/policies, the company allows to be exercised by the employees.

regards,

bala.