Component of HRA in Salary

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 April 2011 What is the maximum componet of HRA in a monthly salary of a employee

Is there any ceiling as per IT Act 1961 ?

If there is no ceiling than how much can be the component of HRA in a salary of Rs.30000/- PM

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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25 April 2011 there is no specific ceiling in Income tax,but there is exemption limit on HRA received that is 40% on basic non metro cities and 50% on basic metro cities

Generally based on HRA exemption in Income tax the HRA also will be decided

CA Prashant Gupta

CA Prashant Gupta (Expert)
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26 April 2011 no limit for HRA in income tax act
but it can be exempt max 40% or 50% of basic for non-metro and metro city respectively. So companies normally give HRA 40% or 50% of basic. So that employee get maximum benefit, rest can be divided in other exempt allowances.

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