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House Rent Allowance (HRA) Practical Examples

Case 1 – When salary, HRA and rent of the house is same through out the year and

a) Rented house is located in Delhi, Mumbai, Kolkata or Chennai

Example – 1
Basic Salary + Dearness Allowance (Rs 1,00,000 * 12)

12,00,000

HRA (Rs 45,000 *12)

5,40,000

Rent of house in Delhi (Rs 30,000 * 12)

3,60,000

Solution
a) HRA received

5,40,000

b) 50% of the salary as the rented property is in metro city

6,00,000

c) Actual rent paid less 10% of salary (3,60,000 – 1,20,000)

2,40,000

HRA Exempt u/s 10(13A) (least of the above)

2,40,000

b) Rented house is located in any city other than Delhi, Mumbai, Kolkata or Chennai

Example – 2
Basic Salary + Dearness Allowance (Rs 1,00,000 * 12)

12,00,000

HRA (Rs 45,000 *12)

5,40,000

Rent of house in Jaipur (Rs 30,000 * 12)

3,60,000

Solution
a) HRA received

5,40,000

b) 40% of the salary as the rented property is not in metro city

4,80,000

c) Actual rent paid less 10% of salary (3,60,000 – 1,20,000)

2,40,000

HRA Exempt u/s 10(13A) (least of the above)

2,40,000

 

Case 2 – When salary,HRA and rent of the house are not same through out the year

a) Salary is not same throughout the year and rented house is located in Delhi, Mumbai, Kolkata or Chennai

Example – 3
Basic Salary + Dearness Allowance (Rs 50,000 * 9) for 9 months

Basic Salary + Dearness Allowance (Rs 60,000 * 3) for 3 months

6,30,000

HRA (Rs 40,000 *12)

4,80,000

Rent of house in Delhi (Rs 35,000 * 12)

4,20,000

Solution

Month HRA received 50% Salary Rent-10% Sal HRA Exempt
April 40,000 25,000 30,000 25,000
May 40,000 25,000 30,000 25,000
June 40,000 25,000 30,000 25,000
July 40,000 25,000 30,000 25,000
August 40,000 25,000 30,000 25,000
September 40,000 25,000 30,000 25,000
October 40,000 25,000 30,000 25,000
November 40,000 25,000 30,000 25,000
December 40,000 25,000 29,000 25,000
January 40,000 30,000 29,000 29,000
February 40,000 30,000 29,000 29,000
March 40,000 30,000 29,000 29,000
HRA Exempt 3,12,000

b) Salary and HRA is not same throughout the year and rented house is not located in Delhi, Mumbai, Kolkata or Chennai

Example – 4
Basic Salary + Dearness Allowance (Rs 50,000 * 9) for 9 months

Basic Salary + Dearness Allowance (Rs 60,000 * 3) for 3 months

6,30,000

HRA (Rs 20,000 *6) for 6 months

HRA (Rs 40,000 *6) for 6 months

3,60,000

Rent of house in Jaipur (Rs 35,000 * 12)

4,20,000

Solution

Month HRA received 40% Salary Rent-10% Sal HRA Exempt
April 20,000 20,000 30,000 20,000
May 20,000 20,000 30,000 20,000
June 20,000 20,000 30,000 20,000
July 20,000 20,000 30,000 20,000
August 20,000 20,000 30,000 20,000
September 20,000 20,000 30,000 20,000
October 40,000 20,000 30,000 20,000
November 40,000 20,000 30,000 20,000
December 40,000 20,000 30,000 20,000
January 40,000 24,000 29,000 24,000
February 40,000 24,000 29,000 24,000
March 40,000 24,000 29,000 24,000
HRA Exempt 2,52,000

c) Salary, HRA & rent is not same throughout the year and rented house is located in Delhi, Mumbai, Kolkata or Chennai

Example – 5
Basic Salary + Dearness Allowance (Rs 50,000 * 9) for 9 months

Basic Salary + Dearness Allowance (Rs 60,000 * 3) for 3 months

6,30,000

HRA (Rs 20,000 *6) for 6 months

HRA (Rs 40,000 *6) for 6 months

3,60,000

Rent of house (Rs 35,000 * 3) for 3 months

Rent of house (Rs 40,000 * 9) for 9 months

4,65,000

Solution

Month HRA received 50% Salary Rent-10% Sal HRA Exempt
April 20,000 25,000 30,000 20,000
May 20,000 25,000 30,000 20,000
June 20,000 25,000 30,000 20,000
July 20,000 25,000 35,000 20,000
August 20,000 25,000 35,000 20,000
September 20,000 25,000 35,000 20,000
October 40,000 25,000 35,000 25,000
November 40,000 25,000 35,000 25,000
December 40,000 25,000 35,000 25,000
January 40,000 30,000 34,000 30,000
February 40,000 30,000 34,000 30,000
March 40,000 30,000 34,000 30,000
HRA Exempt 2,85,000
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