House Rent Allowance (H.R.A.)
Channel: DR. USHA CHAHAL
Date: 2020-07-20

In this video we'll discuss about House Rent Allowance.
There are two situations when an assessee/ employee is living in his/her own house or he/ she is living in a rented accommodation. In that case, an employee will receive some amount in cash from his/her employer as a compensation in order to meet the expenditure regarding the payment of rent in respect of rented residential house. This is called ‘house rent allowance’ (H.R.A.). If an employee is getting HRA, then employee can claim exemption u/s 10(13 A) read with Rule 2 A. Least of the following amount shall be exempt: Excess of rent paid by an assessee over 10% of salary;
50% of salary if residential house is situated at Delhi, Mumbai, Kolkata or Chennai OR 40% of salary if residential house is situated in other parts (other than Delhi, Mumbai, Kolkata or Chennai);
Actual amount of House Rent Allowance received by the assessee. 
Salary = Basic Pay+ DA (If enters or as per terms of employment)/DP + Commission based on fixed rate of turnover.