HOUSE RENTAL ALLOWANCE (HRA)
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Dependent on the following factors:
a) Place of employment
b) Salary received
c) Rent Paid
d) HRA Received
Calculation of HRA is as follows
Least of:
a) Actual HRA received
b) 50% of the salary (metros: Delhi, Kolkatta, Chennai, Mumbai) 40% of the salary (others)
c) Rent paid in excess of 10% of salary
SALARY = BASIC PAY + DEARNESS ALLOWANCE
Essentials for claiming the HRA Deduction
a) HRA should be a part of the salary
b) Rent must be paid by the employee
· Rent receipts are required
· If you are paying any amount to your parents and staying in their house not to worry you can show that as rent as well. (but consider taking an advice before taking this step)
· If no rent is paid then no deduction
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