Note that Our Company situated in Metro City. Please tell us can we paid 37% HRA(House Rent Allowance) on Basic Salary or paid 50 % on basic salary
4 Replies
Ruchika Somani
(Coaching and Practice in Tax Audit Law.)
(4429 Points)
Replied 22 June 2018
The actual HRA offered will be the lowest of the following three provisions:
- The amount received as the HRA from the employer.
- Actual rent paid less 10% of the basic salary.
- 50% of the basic salary if staying in a metro city and 40% in a non-metro city.
- Salary means Basic+Fixed commission of turnover+DA.
niloy sanyal
(account manager)
(777 Points)
Replied 22 June 2018
If we shown HRA 37% on Basic Salary then it is wong as per income tax act or.................
(Guest)
i think its ok..
For calculation of Income Tax of Employee please follow this rule
The deduction available is the least of the following amounts:
a. Actual HRA received;
b. 50% of [basic salary + DA] for those living in metro cities (40% for non-metros); or
c. Actual rent paid less 10% of basic salary + DA
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