HRA Calculation: Every earning person wants to save tax. Employees can also do this through tax exemption on HRA. In metro cities, 50% of the basic income of the employee and in non-metro cities, 40% of the basic income is given as HRA. Let us tell you who can get tax exemption under HRA.
HRA Calculation: An important question before all working people is how can they save income tax? Most people do not know this, but House Rent Allowance (HRA) is exempted under the Income Tax Act, with the help of which you can also save tax. Today we will tell you about saving tax through HRA and will also tell you how HRA can be calculated and who gets HRA. Let’s start without any delay.
Who can save through HRA?
Whether to pay HRA or not depends on the company and only those who are paid HRA by the company can get tax savings on the basis of HRA. Before we tell you about the tax savings from HRA, let us first tell you how much HRA is given to the employees. In metro cities, 50% of the employee’s basic earnings are given as HRA. Whereas in non-metro cities, the employee gets 40% of his basic earnings as HRA.
How to get tax exemption on HRA?
Under Income Tax Act Section 10 (13A), employees are given the option of tax savings under HRA. The employee is given tax exemption on the basis of 50% of his basic earnings, HRA received or rent amount after deducting 10% of the basic earnings from the remaining amount. Remember, whichever amount is the smallest among these three, you will get that as tax exemption. Along with this, the employee should also keep in mind that the house for which he is paying rent should not be in his name.
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