06 March 2008
If you happen to be a salaried employee claiming House Rent Allowance (HRA) from your employer, you are eligible for an Income Tax exemption under Section 10(13A) of the Income Tax Act. You calculate this exemption amount as under.
Find the minimum of the following three options:
a) Actual house rent allowance received from your employer b) Actual house rent paid by you minus 10% of your basic salary c) 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 minimum figure is the allowed income tax exemption on house rent allowance.
06 March 2008
Is the questioner wanting to know manner of calculation of allowable HRA under IT Act or how to structurise HRA to get maximumum tax benefit?
CAclubindia
