How Is HRA Decided?: Basic Salary
How Is HRA Decided?: Basic Salary
How Is HRA Decided?: Basic Salary
Self-employed
individuals are exempt from claiming HRA. This exemption is also available only if the employee
is living in rented accommodations. In case the employee lives in his/her own house and does not
pay any rent, he/she cannot claim HRA.
In case the employee is living in a rented accommodation and the rent paid exceeds Rs.1 lakh in one
financial year then the PAN details of the landlord need to be submitted along with the HRA claims.
For the purpose of calculating the HRA, the salary is defined as the sum of the basic salary ,
dearness allowances and any other commissions. If the employee is not receiving a dearness
allowance or commissions then the HRA will be 50%/40% of the basic salary.
The actual HRA offered will be the lowest of the following three provisions: