House Rent Allowances calculation for IT Exemption

[SURYAKANT MITHBAVKAR]

Kindly provide me how to calculate HRA for IT exemption with examples.

[Guest]

HRA CALCULATION ( LEAST OF FOLLOWING WILL EXEMPT)

1 ACTUAL RECIPET

2 40%/50% OF SALARY

3 RENT-10% OF SALARY

HERE SALARY MEAN = BASIC PAY+FDA+FDP+% COMMISSION ON SALES

50% OF SALARY IF PROPERTY RENTED AT BOMBEY,DELHI,CULCUTTA,MADRAS I.E (BCDM)

IN ANY OTHER CASE WE WILL TAKE 40% OF SALARY

AI Summary

Understanding HRA: Exemption Calculated on Actual HRA, Salary Percentage, and Rent Minus 10% Salary. A query was raised regarding the calculation of House Rent Allowance (HRA) for income tax exemption. The response provided outlines that the exempted HRA is the least of the following: the actual HRA received, 40% or 50% of the salary (depending on the city), and the rent paid minus 10% of the salary. The salary for this calculation includes basic pay, FDA, FDP, and commission on sales. A 50% salary rate applies if the property is in major cities like Bombay, Delhi, Calcutta, or Madras; otherwise, a 40% rate is used.