Guide to .. Tax Management ,Tax Planning and Tax Saving
 

House Remt Allowance [HRA] for Calculating Salary Income

Employees living in hired (rented) houses. Sometimes the employer does not provide rent- free accommodation but instead makes a provision to pay some amount in cash, so that the employee may be compensated to some extent as far as rent is concerned. The amount of cash paid is known as House Rent Allowance. Out of the total H.R.A. received, an amount equal to the minimum of the following three items is exempted from tax u/s 10(13A) read with Rule 2A and balance, if any, will be added in the salary of the employee for tax purpose. The three items are

House Remt Allowance [HRA] for Calculating Salary Income

Quantum of Exemption: Minimum of following three limits:

 

Mumbai / Kolkata / Delhi / Chennai

Other Cities

(i)

Allowance actually Received

Allowance actually Received

(ii)

Rent Paid in excess of 10% of Salary

Rent Paid in excess of 10% of Salary

(iii)

50% of Salary

40% of Salary

 

Taxable HRA = Actual HRA received — Exempted amount

Note :
The exemption in respect of HRA is based upon the following factors:

(1) Salary
(2) Place of residence
(3) Rent paid
(4) HRA received.

Since there is a possibility of change in any of the above factors during the previous year, exemption for HRA should not always be calculated on annual basis. As long as there is no change in any of the above factors it can be calculated together for that period. Whenever there is a change in any of the above factors, it should be separately calculated till the next change.
Contents : Salary Income
 

 Important Links....for calculating Salary Income

(A). Salary -Definition & Meaning
(B). Provident Fund
(C). Allowance
(D). Perquisites
(E). Profit in lieu of Salaly
(F). Retirement Benefits
(G). Deductions
(H). Table Presentation of Salary Income (Section 15 to 17)
 
 
 
 
Tax Computation with Assessment of Salaried Person, HUF, Individuals
Tax Computation with Assessment of Salaried Person, HUF, Individuals.

Computation of Income with Assessment Under the Head 'Salary', 'HUF', 'Individuals'.


Indivisuals
HUF
Salaried Person
 
 
Deductions [Sections 80A to 80U (Chapter VIA)]
Deductions [Sections 80A to 80U (Chapter VIA)]

Deductions to be made in Computing Total Income [Sections 80A to 80U (Chapter VIA)]

Know more ...
 
Get.. Tally.ERP9 Book + GST Practical Assignment @ Rs.550 Tally.ERP9 Book Online Order Tally.ERP9 Book Content
 
List of Exempted Incomes (Tax-Free) Under Section-10
List of Exempted Incomes (Tax-Free) Under Section-10

Section-wise Index of Exempted Incomes Under Section 10

Know more ...
 
© 2019 : IncomeTaxManagement.Com