HRA (House Rent Allowance) & How is HRA Calculated?

Ask the Community Income Tax
1

We know HRA (House Rent Allowance) is a salary component. How is HRA Calculated?

2

Hi Adarsh,
If you are asking specifically on how much HRA can be paid to an employee, then the computation is very simple. Ascertain if the employee is staying in a rented house in any of these four metro cities, i.e. Delhi, Mumbai, Kolkata or Chennai. If yes, then the employee can avail HRA of 50% of basic salary. For any other cities or towns, the HRA is at 40% of basic salary.
Trust this helps.

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Thank you Vinod @vgulvady !