Most of us would be aware of the 3 rules for calculating HRA exemption and how it works .
(Recap-
As per the Indian income tax law, the HRA exemption should be calculated as the least of the following.
1. Rent paid in excess of 10% of basic salary.
2. Actual HRA received by the employee.
3. 40% of BASIC ( non metro) (50% if metro) )
If during a particular year
1) a person remains unemployed for some time or
2) changes employment between metro/non metro and his HRA and rent paid change
3) remains as salaried employee for a particular period of the year only
4) HRA / Rent changes when working for the same company
and many more such scenarios, how to calculate HRA exemption ( at a yearly/ monthly level)
There is no definite answer I could figure out ,but the following link sounds logical.
If any of the readers have more authentic information, please do drop a mail
http://www.simpletaxindia.org/2011/01/hra-exemption-calculation-monthly.html
(Recap-
As per the Indian income tax law, the HRA exemption should be calculated as the least of the following.
1. Rent paid in excess of 10% of basic salary.
2. Actual HRA received by the employee.
3. 40% of BASIC ( non metro) (50% if metro) )
If during a particular year
1) a person remains unemployed for some time or
2) changes employment between metro/non metro and his HRA and rent paid change
3) remains as salaried employee for a particular period of the year only
4) HRA / Rent changes when working for the same company
and many more such scenarios, how to calculate HRA exemption ( at a yearly/ monthly level)
There is no definite answer I could figure out ,but the following link sounds logical.
If any of the readers have more authentic information, please do drop a mail
http://www.simpletaxindia.org/2011/01/hra-exemption-calculation-monthly.html
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