How to Calculate House Rent Allowance Exemption under section 10(13A)?
The Exemption of House Rent Allowance is computed as the following manner:
least of the following 3 is exempt from tax u/s 10(13A):
- 40% salary (50% in case of a metropolitan city);
- Actual HRA received from employer during the period the rented house is occupied by the employee;
- The excess of rent paid over 10 per cent of salary.
Note: Salary for the purpose of HRA means – Basic + DA (only if forming part of salary for retirement benefits) + any fixed % commission on sales turnover.
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