The House Rent Allowance (HRA) component of your salary is calculated as a percentage of your basic salary. The exact percentage can vary depending on your company\'s salary structure and policies. Coming to your query, how much HRA of basic salary is allowed? It is 50% of the base pay if the employee lives in a large city.
How much HRA Calculated On Basic Salary?
To determine the HRA exemption amount for tax, you consider the least of the following three amounts:
Actual HRA received from your employer.
50% of your basic salary if you live in a metro city (like Bangalore) or 40% if you live in a non-metro city.
Rent paid minus 10% of your basic salary.
Let\'s say your basic salary is Rs.50,000 per month, you receive Rs.30,000 as HRA, and you pay Rs.20,000 in rent per month in Bangalore.
The following calculation will determine the HRA exemption.
Actual HRA received: Rs.30,000
50% of basic salary: Rs.25,000 (since Bangalore is a metro city)
Rent paid minus 10% of basic salary: Rs.20,000 - ₹Rs.5,000 = Rs.15,000
I hope you found this helpful.
Get Assistance in Claiming HRA for Tax from Experts at NoBroker.
Read more
How HRA exemption is calculated?
Your Feedback Matters! How was this Answer?
Shifting, House?
✔
Lowest Price Quote✔
Safe Relocation✔
Professional Labour✔
Timely Pickup & Delivery
Intercity Shifting-Upto 25% Off
Check Prices
Intracity Shifting-Upto 25% Off
Check Prices
City Tempo-Upto 50% Off
Book Now
Wondering about HRA is how much of basic? Let me explain this. HRA provisions are given under section 10(13A) of the Income Tax Act.
The House Rent Allowance (HRA) is not a fixed percentage of your basic salary. Instead, it is determined based on various factors such as your salary, the actual rent you paid, and the city of your residence.
So, how much is HRA of basic?
HRA is calculated as the minimum of three amounts:
Actual HRA received from your employer.
50% of your basic salary for metro cities or 40% of the basic salary for non-metro cities.
Actual rent paid minus 10% of the basic salary.
For example, a man lives in Delhi, his basic salary is Rs 50,000 per month. He receives Rs1,00,000 as HRA and pays a monthly rent of Rs 15,000.
Calculation:
Actual HRA = Rs 1,00,000
Actual rent paid = (15000*12) – 10% (50000*12) = Rs 1,20,000
50% of basic salary = 50% (50,000*12) = Rs 3,00,000
Least of the above is Rs 1,00,000.
So, the person is eligible for exemption of Rs 1,00,000 as HRA.
I hope this answers your question:
how much should be HRA of basic salary.
Apply for Home Loan at Low Interest Rates through NoBrokerRead more
How to claim HRA if not mentioned in Form 16?
How Much is HRA of Basic?
Divya Pandey
115 Views
2
2 Year
2023-12-22T16:50:23+00:00 2023-12-22T16:50:24+00:00Comment
Share