Sage-Tips

What are the rules for HRA?

HRA Exemption Rule

• The actual rent paid minus 10\% of the basic salary + DA (Dearness Allowance)
• In case an employee is staying in a metro city, 50\% of the basic salary and 40\% if he lives in a non-metro city.
• The total amount received as HRA from the employer.

Who are eligible for HRA in central government employees?

The current HRA scheme which is based on the suggestion of the 6th Central Pay Commission is 30\% of basic pay + grade pay + military service pay + NPA for personnel residing in Class X cities, 20\% for those residing in Class Y cities, and 10\% for those residing in Class Z cities.

Is there any limit on HRA?

Your allotted HRA cannot exceed more than 50\% of your basic salary. As a salaried employee, you cannot claim for the full rental amount you are paying.

Is HRA taxable for govt employees?

Although it is a part of your salary, HRA, unlike basic salary, is not fully taxable. Subject to certain conditions, a part of HRA is exempted under Section 10 (13A) of the Income-tax Act, 1961. The amount of HRA exemption is deductible from the total income before arriving at a gross taxable income.

When will HRA be revised for central government employees?

The House Rent Allowance (HRA) will be revised for Central Government employees from 1st July 2021 After the Cabinet approval on DA hike by 11\% from the existing rate of 17\%, the new cumulative DA has been enhanced to 28\% from 1st July 2021. The hike of Dearness Allowance is also impacting the rate of House Rent Allowance (HRA).

What is the House Rent Allowance (HRA) for central government employees?

Indian cities are classified according to the population for the purpose of House Rent Allowance (HRA) to Central Government Employees: The revised rates of HRA will not be less than Rs.5400 for X Class cities, Rs. 3600 for Y Class cities and Rs. 1800 for Z class cities.

What is the percentage of HRA in salary?

1 Actual House Rent Allowance (HRA) received by the employee in the year. 2 Rent paid by the employee for his accommodation in excess of 10\% of his salary. 3 50\% of the salary, if he stays in any of the 4 metro cities of Delhi, Mumbai, Kolkata or Chennai; otherwise, 40\% of the salary.

What does HRA stand for?

Implementation of recommendations of the Seventh Central Pay Commission relating to grant of House Rent Allowance (HRA) to Central Government employees. Re-classification/Upgradation of Cities/Towns on the basis of Cencus-2011 for the purpose of grant of House Rent Allowance to Central Government Employees