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X is entitled to a basic salary of 60,000 p.m. and dearness allowance 20,000 p.m., 50% of which forms part of retirement benefit. He is also entitled to HRA 30,000 p.m. He pays 30,000 p.m rent for a house in Chennai. Compute the Taxable HRA.
Asked by Shubham Last Modified
Answer HRA is exempted to the least of the following:
Hi!
Taxable HRA = Actual HRA (-) Exempt HRA
Taxable HRA = 3,60,000 (-) 2,64,000 (see below computation of Exempt HRA)
Taxable HRA = 96,000
# Least of the following is Exempt HRA:-
1. Actual HRA received = 3,60,000
2. Rent paid (-)10%of salary =2,64,000 (For salary, refer computation 'a')
3. 50% of basic salary (As acommodation is in Metro City i.e. Chennai) = 3,60,000
Computation 'a':-
Salary = Basic salary (+) Dearness allowance
In this case,
Salary = 7,20,000(+)2,40,000 = 9,60,000
Himanshi
read lessSalary = basic salary +dearness allowance (for retirement benefits)
Salary=720000+120000(only 10000 is for retirement benefits)
=840000
Computation of HRA
HRA recieved 360000
(-)whichever is less
HRA recieved 360000
Rent paid-10%of salary
{360000-(10%×840000)} 276000
50%of salary
(50%×840000) 420000
(276000)
Taxable HRA 84000
read lessView 2 more Answers
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