How to calculate the HRA Exemption in Income Tax U/s 10(13A)
- The actual amount of HRA received by the employee from his/her employer
- 50% of the Salary for individuals residing in Metro Cities (Delhi, Mumbai, Chennai or Kolkata)
- and 40% other Cities.
- Rent paid in excess of 10% of Salary (Basic Pay + D.A.)[Grade pay also include in case of Govt employee]
For an Example:-
For Kolkata City - [Metro City]
- Basic Pay Rs. 3,00,000/- P.A.
- D.A. Received Rs. 60,000/- P.A.
- House Rent Received Rs. 2,40,000/- P.A.
- House Rent Paid by the employee Rs. 1,20,000/- P.A.
- Hence the Calculation will be as follows :-
- The Actual H.R.A. Received Rs. 2,40,,000/-
- 50% of the salary [Basic Pay + D.A.] = 1,80,000/- [ For Metro City]
- Excess of rent paid over 10% of salary Rs. 1,20,000 -( 10% of Rs.3,60,000[B.pay + D.A.] =Rs. 84,000
Here is the HRA exemption will be entitled Rs. 1,20,000 -36,000 = 84000/- Relief
And Rs. 1,56,000 will be Chargeable to Income Tax.
