Sunday, March 1, 2015

Treatment of House Rent/HRA for Tax Calculations

Treatment of House Rent/HRA for Tax Calculations:
1 . If an employee is getting House Rent Allowance (HRA) from the employer Exemption will be available u/s. 10(13A), which will be least of the following :
A) Actual amount received by the assesse
B) Actual amount paid towards less 10% of salary
C) 50% of the salary (in case of Mumbai, Delhi, Kolkata, Chennai) and 40% in any other case
2. If an employee is not getting HRA Deduction will be available u/s. 80GG, which will be least of the following :
A) Rent paid less 10% of Adjusted Total Income
B) Rs. 2000/- p.m.
C) 25% of Adjusted Total Income.

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