1- Valid rent agreement

If you are a tenant, then it is necessary to have a valid rent agreement. Also, you should keep in mind that the rent agreement should be as per the Income Tax rules. For example, if your monthly rent is more than Rs 50 thousand, then TDS must be deducted from it. Apart from this, the rent agreement should contain all the basic details and PAN information of both the landlord and the tenant.

2- Rent receipt

To claim HRA, you must have a valid rent agreement as well as a rent receipt. That is, you will also have to keep the receipt of paying rent to your landlord. Only the rent receipt proves that you have actually paid the house rent to the landlord. While claiming HRA, you have to submit the rent receipt along with the rent agreement.

3- Online rent payment statement

Although no one asks you about the method of paying rent, but if due to some confusion you get a notice from the Income Tax Department, then you may need a bank statement. If you pay in cash, then you will not be able to provide this proof. In such a situation, try to pay the rent online only.

4- Make sure to get the PAN of the landlord

You need the landlord’s PAN only when you file ITR or claim HRA from the company. This helps the Income Tax Department to know who actually received the rent you paid.

Income Tax Department has found irregularities

Some time ago, the Income Tax Department had noticed some irregularities in claiming HRA. The Income Tax Department has found that many employees claimed HRA by giving wrong PAN details. There have also been some cases in which many employees have entered the same PAN details, due to which they were also sent notices. Sometimes it also happens that the Income Tax Department sends notices to people due to not getting sufficient evidence. In such a situation, it is important to have these documents with you, so that you can easily present your case in front of the Income Tax Department.

The post TR Filing: Are you claiming HRA? Keep these 4 documents safe, otherwise if you get a notice first appeared on Rightsofemployees.com.

In such a situation, it is important for taxpayers to understand the important sections of the Income Tax Act, 1961 which help in getting tax exemption and correct tax calculation.

Section 139(1): Mandatory to file ITR if income exceeds prescribed limit

Under Section 139(1), it is mandatory for any person or entity to file income tax returns if their annual income exceeds a prescribed limit. This section also applies in cases where the return is filed voluntarily.

Section 10(13A): HRA exemption on rented house

If a person lives in a rented house and pays rent of more than ₹ 1 lakh annually, he can avail tax exemption on House Rent Allowance (HRA) under section 10(13A). For this, some rules have to be followed.

Section 80C: Deduction up to ₹1.5 lakh on tax saving investments

Taxpayers following the old tax regime are eligible to get a deduction of up to ₹1.5 lakh on investments such as PPF, EPF, ELSS, tax saving FD, and life insurance premium under section 80C. However, this exemption is not available in the new tax regime.

The new system allows deduction of up to 10% of employer’s contribution to NPS only under section 80CCD(2). Apart from this, deduction can be claimed on certain expenses under sections 80JJAA and 80CCH.

Section 80D: Deduction up to ₹1 lakh on health insurance

Tax exemption on premiums paid on health insurance is available under section 80D. If the taxpayer and his family members are below 60 years of age, the maximum exemption is up to ₹25,000. For those aged 60 years or above, the limit is ₹50,000. There is a separate exemption for parents, which can take the total exemption to ₹1 lakh.

Section 24B: Home loan interest deduction up to ₹2 lakh

Interest paid on home loan or home improvement loan is eligible for deduction up to a maximum of ₹2 lakh under section 24B. This deduction is available in both the old and new tax regimes.

Section 234F: Penalty for late filing of ITR

If a person files ITR after the due date, then a penalty is imposed on him under section 234F. For those with income less than ₹5 lakh, this penalty is ₹1,000, while for those with income more than ₹5 lakh, the penalty can be up to ₹5,000. Apart from this, interest may also have to be paid under sections 234A and 234B.

Know from the experts who are required to file ITR? (Applicable only to individual taxpayers)

According to tax expert Balwant Jain, under various provisions of the Income Tax Act, it becomes mandatory for individual taxpayers to file ITR in certain situations, even if their total income does not fall under the scope of tax liability. Let us know in which cases it is necessary to file ITR:

1. Gross income exceeds the basic exemption limit

It is mandatory to file ITR if your total income (before deductions under sections 80C, 80D, 80G, etc.) exceeds the following limits:

General individual: ₹2.5 lakh

Residents above 60 years of age: ₹3 lakh

Residents above 80 years of age: ₹5 lakh

Equal exemption for all in new tax regime: ₹3 lakh

Long term capital gains (LTCG) will also be added to this.

2. Have property or signature authority abroad

If you are a resident taxpayer in India and:

You have any property in your name abroad (even if there is no balance amount)

If you have a foreign bank account or share in a property or have signature authority, it
is mandatory for you to file ITR.

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The post ITR filing 2025: Key Benefits and Penalties related to 80C, 80D, 24B and HRA first appeared on Rightsofemployees.com.

This decision was approved in the cabinet meeting led by Chief Minister Dr. Mohan Yadav and then there was a wave of happiness among the employees.

Whose salary increased by how much?

There has been a huge increase in the salaries of government employees and workers. See the new structure

How much will it affect the government?

Now when the salary will increase, it will also affect the government’s treasury. Minister Kailash Vijayvargiya said that this increase in allowances will put a burden of Rs 1500 crore on the state government every year. But the government will take full care of its employees. Head of the State Ashok Pandey of Madhya Pradesh Karmachari Manch also praised this decision. He says that this will provide relief to lakhs of government employees and laborers.

Big gift from the government in the new year

The MP government has taken this big decision to bring a smile on the faces of the employees. In this era of rising inflation, a good salary and more allowance is no less than a bonus. Now the question is what will be the next gift? What other facilities can the government provide to the employees? Will DA increase or will there be changes in the promotion policy? This will also be seen in the coming time. So for now, this news is no less than a rainbow for government employees.

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The post 7th Pay Commission: Big relief to government employees, 10% increase in HRA first appeared on Rightsofemployees.com.

When will the 8th Pay Commission be implemented?

The 8th Pay Commission (8CPC) is likely to be implemented from 2026. The government will consider its recommendations in 2025. Government employees and pensioners are eagerly waiting for it.

How much will the salary increase?

In the 7th Pay Commission, a 14% salary hike was given, but in the 8th CPC, an increase of 20-30% is expected. The fitment factor will play a big role in this.

What will be the fitment factor?

In 7CPC, the fitment factor was 2.57, which made the minimum salary ₹18,000. In 8CPC, it can be 1.90, 2.08 or 2.86, which will lead to a significant increase in the basic pay. Most likely, the fitment factor will be fixed at 1.90.

What will be the minimum basic salary?

If the fitment factor is fixed at 1.90, then the minimum basic salary of government employees can increase from ₹ 18,000 to ₹ 34,200. This will also increase the salary of mid-level and senior employees significantly.

What changes will be there in allowances?

There may also be a big jump in Dearness Allowance (DA), Transport Allowance (TA) and House Rent Allowance (HRA). It is estimated that DA will again start from 0% and will increase gradually.

How much will the retirement pension increase?

Currently, the minimum pension is ₹9,000, which may increase to ₹15,000 to ₹20,000 after the implementation of 8CPC. The maximum pension may go up to ₹1.25 lakh.

What benefits will government employees get?

Basic pay will increase to tackle inflation. All allowances will increase. Pensioners will get better revised pension. Retirement gratuity and PF contribution will also improve.

Will there be a difference in the salaries of central and state employees?

Central employees always get salary as per Pay Matrix, whereas state governments can apply different rules for their employees. Some states may delay the implementation of 8CPC.

Who will benefit the most from the 8th Pay Commission?

Employees who are from level 1 to level 6 will get the most benefit. Higher level officials will also get a salary hike, but the fitment factor may be different for them.

Will 8CPC affect the private sector?

Due to increase in government salary, there can be change in salary in private sector also, because companies can also increase salary to retain talented people.

Will Modi government implement it soon?

So far the government has not officially announced 8CPC, but it is believed that its recommendations may come out in 2025 and it can be implemented from 2026.

When will DA (Dearness Allowance) increase?

After the implementation of 8th Pay Commission, Dearness Allowance (DA) will start from 0% and will be increased every 6 months.

What changes will happen in gratuity and PF?

Government employees will also get an increase in retirement gratuity and PF contribution. This will strengthen their financial security.

Will the 8th Pay Commission make government jobs more attractive?

Absolutely! Government jobs will become more rewarding with increased salaries, better allowances and a strong retirement pension.

What impact will 8th CPC have on India’s economy?

Increasing the salary of government employees will bring more money into the market, which will increase demand and strengthen the economy. However, the financial pressure on the government will also increase.

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The post 8th Pay Commission: Along with DA, TA, HRA, there will be a big jump in PF-gratuity too! Know everything in 15 points first appeared on Rightsofemployees.com.

It is being said that the government may announce some exemptions in the new tax regime. Experts are demanding to increase HRA, Section 80C tax deduction and standard deduction of Rs 1 lakh in Budget 2025.

Standard Deduction Limit

A new tax system was introduced in the Union Budget 2020, which aims to simplify the tax infrastructure. However, no exemption is given in this. Only standard deduction is available. The benefit of standard deduction is also given under the old tax system. Currently, the standard deduction in the new tax system is Rs 75 thousand, which can be increased to Rs 1 lakh. At the same time, the standard deduction in the old tax system is Rs 50 thousand. This can also be increased to Rs 1 lakh.

Limit of Section 80C

Under Section 80C of the Income Tax Act, 1961, taxpayers are given tax exemption on investment up to Rs 1.5 lakh. In such a situation, now there is a demand to increase its limit, which has not changed for a long time. There is a demand to increase it to Rs 2 lakh. Currently, investors can claim exemption by investing in places like PPF, LIC, PF and home loan.

Home loan

individuals are eligible to claim deduction on payments made towards the principal amount of the home loan under section 80EE. The deduction for home loan interest payment can be up to Rs 50,000 per financial year. There is a demand to increase this in the budget as well.

HRA exemption

is also a common demand of taxpayers that HRA exemption should be included in the new tax system. Currently, this benefit is applicable only under the old tax system, which leads to tax saving. Experts believe that the inclusion of this exemption will be of great help to people.

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The post Budget 2025: HRA, 80C and standard deduction…These big announcements can be made in the budget first appeared on Rightsofemployees.com.

7th pay commission latest news: The month of March was very good for the central employees. The Union Cabinet approved 4 percent increase in dearness allowance (DA Hike). Dearness allowance has increased to 50 percent. Revision was also done in HRA. But, the happiness for the central employees did not stop here.

Apart from Dearness allowance and HRA, there are 9 such allowances, the benefit of which is being given to the central employees. These allowances have also increased.

Benefit of 50 percent dearness allowance

The increase in Dearness Allowance (DA) has also extended to other allowances. Dearness allowance was increased by 4 percent to 50 percent and HRA was also increased by 3,2,1 percent. Apart from this, Travel Allowance (TA) has also increased. The benefits of all these allowances will be available from March 31.

Which allowances increased?

There has been a huge increase in 9 allowances including dearness allowance of central employees.

•  House Rent Allowance (HRA)
• Children’s Education Allowance (CAA)
• Childcare Special Allowance
• Hostel Subsidy
• TA on Transfer (Transportation of Personal Effects)
• Gratuity Limit
• Dress Allowance
• Mileage Allowance for Own Transport
• Daily allowance

Now will the mathematics of dearness allowance change?

While implementing the 7th Pay Commission in the year 2016, the government had reduced dearness allowance to zero. According to the rules, as soon as the dearness allowance reaches 50 percent, it will be reduced to zero and the money that the employees will be getting as allowance according to 50 percent will be merged into the basic salary i.e. minimum salary.

Will go. Suppose the basic salary of an employee is Rs 18000, then he will get 50 percent DA of Rs 9000. But, once the DA is 50 percent, it will be added to the basic salary and the dearness allowance will again be reduced to zero. This means the basic salary will be revised to Rs 27,000. However, for this the government may have to make changes in the fitment also.

When will dearness allowance become zero?

According to experts, the new dearness allowance will be calculated in July. Because, the government increases dearness allowance only twice a year. Approval for January has been given in March. Now the next revision is to be implemented from July 2024. In such a situation, dearness allowance will be merged only and it will be calculated from zero.

Meaning, the AICPI index from January to June 2024 will decide whether dearness allowance will be 3 percent, 4 percent or more. As soon as this situation is cleared, 50 percent dearness allowance will be added to the basic salary of the employees.

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The post 7th Pay Commission : Not only DA, TA, HRA, there is a huge increase in total 9 allowances of central employees, they became rich first appeared on Rightsofemployees.com.

7th pay commission latest news today: There is good news for central government employees. The increase in his salary has started. Recently the new dearness allowance of central employees has been confirmed. However, there is still time for its announcement. A decision on this is expected by March.

But, the matter will not stop only at dearness allowance. After DA Hike, now another good news is waiting for them. Actually, the House Rent Allowance of the employees is also going to increase. 50 percent dearness allowance has been confirmed. Now after this is the number of revision in HRA. There is to be an increase of 3 percent in this.

HRA will increase after DA hike

4 percent dearness allowance has been confirmed. The Union Cabinet will also approve it in March. In this situation, dearness allowance to central employees will be 50 percent. It will be implemented from January 1, 2024. Let us tell you, in July 2021, when dearness allowance crossed 25 percent, there was a revision of 3 percent in HRA.

At that time the upper limit of HRA was increased from 24 percent to 27 percent. Now there will be a revision in HRA once the dearness allowance reaches 50 percent. This will once again increase by 3 percent. HRA of metro cities i.e. cities falling in X category will increase to 30 percent. Employees working in these cities will be paid house rent allowance at the rate of 30 percent.

Government told when HRA will increase

According to the Department of Personnel and Training (DoPT), the revision of House Rent Allowance (HRA) for central employees is done on the basis of dearness allowance. The categories of House Rent Allowance (HRA) are according to X, Y and Z class cities. According to the category of cities, the current rate is 27 percent, 18 percent and 9 percent.

This increase along with DA is applicable from July 1, 2021. But, the government had issued a memorandum in the year 2016. In which there were instructions to revise HRA along with DA Hike from time to time. There was a revision in HRA when the dearness allowance increased to 25 percent in 2021. Now there will be next revision in HRA after 50 percent dearness allowance.

What is the formula for HRA calculation?

There is a formula to calculate HRA. In the present situation, house rent is given to central employees according to the category of the city. The government has divided cities/towns into X, Y and Z categories. Where the government gives 27 percent house rent allowance in X category, 18 percent in Y category and 9 percent in Z category. This house rent allowance is decided according to the basic salary of the employee.

How much will be the HRA for which city?

1. In X category-
Delhi, Ahmedabad, Bengaluru, Mumbai, Pune, Chennai and Kolkata have been kept in X category. The employees working here get HRA of 27 percent of the basic pay.

2. In Y category-
Patna, Lucknow, Visakhapatnam, Guntur, Vijayawada, Guwahati, Chandigarh, Raipur, Rajkot, Jamnagar, Vadodara, Surat, Faridabad, Ghaziabad, Gurgaon, Noida, Ranchi, Jammu, Srinagar, Gwalior, Indore, Bhopal, Jabalpur, Ujjain, Kolhapur, Aurangabad, Nagpur, Sangli, Solapur, Nashik, Nanded, Bhiwadi, Amravati,

Cuttack, Bhubaneswar, Rourkela, Amritsar, Jalandhar, Ludhiana, Bikaner, Jaipur, Jodhpur, Kota, Ajmer, Moradabad, Meerut, Bareilly, Aligarh, Agra, Lucknow, Cities like Kanpur, Allahabad, Gorakhpur, Firozabad, Jhansi, Varanasi, Saharanpur come. The employees living here get HRA of 18 percent of the basic pay.

3. In Z category-
Apart from the X and Y category cities, all other cities have been kept in Z category. Employees working in these cities get HRA of 9 percent of the basic pay.

How will the HRA of employees increase?
The next revision in House Rent Allowance will be in March 2024. As soon as dearness allowance reaches 50 per cent, the maximum rate of HRA will increase from the existing 27 per cent to 30 per cent. This will be for employees falling in X category. In the second category i.e. Y, the revision will be 2 percent. Its current level is 18%, it will be increased to 20%. After this, Z category employees will get 10% HRA, increased by 1 percent.

If DA became zero then HRA was reduced.
When the 7th Pay Commission was implemented, HRA was reduced from the range of 30, 20 and 10 percent to 24, 18 and 9 percent. Also its 3 categories were created X, Y and Z. During that time DA was reduced to zero. At that time itself, it was mentioned in the notification of DoPT that when DA reaches the 25 percent mark, HRA will be automatically revised and there will be an increase of 3, 2, 1 percent according to the category. Now when dearness allowance reaches 50 percent, HRA will increase again in the same manner.

The post Good News for central employees! HRA will also increase from this day, there will be double benefit first appeared on Rightsofemployees.com.

However, it will be announced in March 2024. At the same time, another big good news is waiting for them. After January 31, there will be another increase of 3% in the allowance of central government employees. This will be the most beneficial gift after 2021.

This allowance will increase by 3 percent

Dearness Allowance (DA) of central employees will soon cross 50 percent. At present dearness allowance is being paid at the rate of 46%. Along with dearness allowance, there will be a rise in another allowance of central employees. House Rent Allowance (HRA) is also certain to increase. The central government has clarified the rules regarding this increase. This rule is related to dearness allowance only.

In the year 2021, there was a revision in HRA when dearness allowance crossed 25%. In July 2021, as soon as DA crossed 25%, there was a jump of 3% in HRA. The current rates of HRA are 27%, 18% and 9%. It is expected that dearness allowance will soon reach 50 percent. If this happens, there will be a revision of 3 percent in HRA once again.

HRA benefits will be available according to cities

According to DoPT, the revision in House Rent Allowance (HRA) for central employees is done on the basis of dearness allowance. All employees are going to get the benefit of increased HRA. According to the category of the city, HRA is available at the rate of 27 percent, 18 percent and 9 percent. The government had issued a memorandum for this in the year 2015. In this HRA was linked to DA. Its three rates were fixed. 0, 25, 50 percent.

HRA will be maximum 30 percent

The next revision in House Rent Allowance will be 3%. The maximum current rate is 27 percent. After revision HRA will be 30%. But, this will happen when dearness allowance reaches 50%. According to the memorandum, as soon as DA reaches 50 percent, HRA will become 30%, 20% and 10%. The categories of House Rent Allowance (HRA) are according to X, Y and Z class cities. Central employees who fall in X category are getting 27 percent HRA, which will become 30% if DA is 50%. At the same time, for Y Class people it will increase from 18 percent to 20 percent. For Z Class people, it will increase from 9 percent to 10 percent.

HRA is available from X,Y and Z categories?

Cities with population of more than 50 lakh come in X category. The central employees posted in these cities will get 27 percent HRA. Whereas in Y category cities it will be 18 percent and in Z category it will be 9 percent.

How is HRA calculated?

According to the 7th Pay Matrix, the maximum basic salary of central employees on grade pay at level-1 is Rs 56,900 per month, then their HRA is calculated at the rate of 27 percent. If you understand with simple calculation…

HRA = Rs 56,900 x 27/100 = Rs 15,363 per month
With 30% HRA = Rs 56,900 x 30/100 = Rs 17,070 per month
Total difference in HRA: Rs 1,707 per month
Increase in annual HRA – Rs 20,484

The post 7th pay commission: This allowance of central employees will increase by 3% after January 31 first appeared on Rightsofemployees.com.

How much will DA increase?

If media reports are to be believed, then there may be an increase of 4 to 5 percent in dearness allowance for the half year from January to June. If the allowance increases even by 4 percent, then the DA of central employees will increase to 50 percent. Let us tell you that at present the allowance is 46 percent. The government had increased the allowance by 4 percent for the second half of the year 2023. Due to this, the allowance for the July to December half year has increased to 46 percent. If there is an increase of 5 percent in the allowance then it will cross 50 i.e. 51 percent.

HRA increases as allowance increases

As soon as the allowance of central employees is 50 percent or more, HRA will be revised. According to the recommendation of the Seventh Pay Commission, HRA will be revised when the allowance is 50 percent or more. For increase in HRA, cities have been divided under three categories – X, Y & Z.

How much will HRA increase?

Currently, employees living in cities/towns X,Y & Z are getting 27, 18 and 9 percent HRA respectively. But after the increase, if the central employee lives in X category cities/towns, then his HRA will increase to 30 percent. Similarly, the HRA rate for Y category will be 20 percent and for Z category it will be 10 percent. It means that due to the increase in HRA along with DA in the new year, there will be a huge increase in the salary of central employees.

The post 7th pay commission: Along with DA, HRA may also increase in the new year, know complete details first appeared on Rightsofemployees.com.

DA in the new year, the House Rent Allowance (HRA) is also going to increase. According to the recommendations of the Seventh Pay Commission, dearness allowance of central employees is increased twice a year on half yearly basis. The previous increase was made in October 2023 for the July-December half year. This increase was 4 percent. Due to this, the allowance of central employees has increased from 42 percent to 46 percent.

when will it be announced

According to the pattern so far, the increase in dearness allowance for the half year of January-June 2024 can be announced during the month of March. According to the current environment, it is believed that the government can once again increase dearness allowance by 4 percent. If this happens then the allowance of central employees will be 50 percent. Along with this, HRA of central employees will also increase.

How much will HRA increase?

In the recommendation of the Seventh Pay Commission, there is a provision to revise HRA when the dearness allowance is 50 percent or more. For HRA increase, cities have been divided under three categories – X, Y & Z. If the employee lives in X category cities/towns, his HRA will increase to 30 percent. Similarly, the HRA rate for Y category will be 20 percent and for Z category it will be 10 percent. Currently, employees living in cities/towns X,Y & Z are getting 27, 18 and 9 percent HRA respectively. It means that after the increase in HRA and DA, there is going to be a huge increase in the salary of central employees.

The post Central employees good news, House Rent Allowance (HRA) is also going to increase first appeared on Rightsofemployees.com.

Now only one and a half month is left for the year to end. After this the journey of the new year will begin. In the new year, the gifts will also be new and there will be more. After the increase in DA in October, now the dearness allowance of the employees will be revised in the new year. But, along with it, increase in Travel Allowance (TA), HRA is also possible. Also, the biggest update can be found on the fitment factor.

There has been no change in fitment for many years. Based on the recommendations of 7th CPC, Fitment Factor was implemented to increase the minimum salary of central employees. Due to imposition of fitment factor, the minimum salary of central employees directly increased from Rs 6000 to Rs 18000.

The fitment factor was determined to be 2.57 times. However, as per the recommendations, it was said to keep it at 3. If it had been 3 then the minimum salary would have been Rs 21,000. But, the central employees demanded to keep it at 3.68. Since then this matter is pending. Even after many years there was no change in the fitment factor. But, now good news is coming.

Fitment factor may increase

The good news for central employees is that their fitment factor can be revised in the new year. If sources are to be believed, the government is preparing to please the employees. In such a situation, their fitment can be increased from 2.57 times to 3 times. However, this will also be much less than the current demand. But, even if it is increased by 3 times, there will be a significant increase in the pay band of the employees.

What is Fitment Factor?

As per the recommendations of the 7th Pay Commission, the fitment factor is 2.57 times. While fixing the salary of central employees, apart from allowances like Dearness Allowance (DA), Traveling Allowance (TA), House Rent Allowance (HRA) etc.,

the basic salary of the employee is taken into account as per the fitment of 7th Pay Commission (7th Pay Commission latest update). The factor is calculated by multiplying by 2.57. For example- if the basic salary of a central employee is Rs 18,000, then excluding allowances his salary will be 18,000 X 2.57 = Rs 46,260. If this is considered as 3 then the salary will be 21,000X3= Rs 63,000.

Employees will get bumper benefits in this. When the salary of a central employee is fixed, then all kinds of allowances are added, like DA, TA, HRA, medical reimbursement etc. After increase in DA, TA is increased on the same basis. The increase in DA is also linked to TA. Similarly, HRA and medical reimbursement are also decided.

When all the allowances are calculated then the monthly CTC of the central employee is decided. After all the allowances and salary are finalized, now comes the monthly Provident Fund (PF) and gratuity contribution. PF and gratuity contribution is linked to basic salary and DA. PF and gratuity of a central employee is decided by its formula. When all the allowances and deductions are made from CTC then the take home salary of the central employee is decided.

The post Fitment Factor Hike: Good news! The fitment can be increased from 2.57x to 3x – Check details first appeared on Rightsofemployees.com.

There is time till 31 July for ITR filing. You should file your income tax return in time. But before filing ITR, it is very important to know about it well. You can save tax in many ways. HRA is one of them. HRA is a part of your salary only. Under this, you can do tax savings through house rent. Let us tell you how you can get tax benefit from this and how it is calculated.

What is HRA?

HRA is a special tax saving provision under section 10(13A) of the IT Act. The purpose of HRA is to reduce the expenditure on housing. Deduction can be taken as rent. HRA varies from city to city. Its contribution is more in metro cities. This reduces the tax liability. Let us know how to calculate it.

How is HRA calculated?

Suppose you work in Delhi NCR and your basic salary is Rs.40,000. Means your annual salary is Rs.4,80,000. Now out of this you get Rs 11,000 as HRA. If you spend Rs 14,000 for living, then you can take the benefit of HRA exemption amount.

This is the calculation

HRA amount Rs 11,000 x 12 = Rs 1,32,000 50% of basic salary (in metro cities), i.e. 50% of Rs 4,80,000 = Rs 2,40,000 Actual rent of your house, minus 10% of basic salary 1,68,000 (14,000 x 12) (subtract) Rs 48,000 (10% of Rs 4,80,000) = Rs 1,20,000

Now according to this calculation, you are eligible for HRA exemption of the lowest amount of 1,20,000.

The post ITR Filling: How to calculate HRA, here is complete information related to it first appeared on Rightsofemployees.com.

After the increase in HRA, the salary received by the government employees will increase. HRA is given on the basis of the city in which the government employees work. House Rent Allowance is for salary class employees who live in a rented house. Employees are divided into three categories depending on the need and city of the house.

HRA is divided into 3 categories

House Rent Allowance is divided into 3 categories. These categories are X, Y and Z.

(i) Areas with a population of 50 lakhs and above come in the ‘X’ category. Employees falling in this category are given HRA 24 percent as per the recommendation of the Central Pay Commission (CPC) under the 7th Pay Commission.

(ii) ‘Y’ stands for area with population between 5 lakh to 50 lakh. The employees living here are given HRA of 16% of the basic salary.

(iii) Those employees come under ‘Z’ category where the population is less than 5 lakhs. Here HRA is given at 8%.

HRA can be increased to this much

Now employees can get HRA increased to 27% for X category, 18% for Y category and 9% for Z category. On the other hand, when the dearness allowance reaches above 50 per cent, the HRA will increase to 30 per cent, 20 per cent and 10 per cent respectively.

When HRA can be revised

The Modi government may soon increase the HRA as well. For this notification has already been issued by the government. At present, the DA received by the employees is currently 42 per cent. Dearness allowance is to be increased once again in July. It is believed that now it can increase to 46 percent.

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If you start tax planning as soon as the year starts, then you can save a lot of tax. Sometimes the tax on your salary can also be zero. For this, you can use the deductions and exemptions available under the Income Tax Act. Along with this, you will also have to get your salary structure done in such a way that you can get the benefit of maximum reimbursement. If you use every investment and reimbursement to the maximum extent, then it is possible that you can get tax exemption even on salary up to Rs. 12 lakh, that is, there will be zero tax on your salary (Zero tax on rs. 12 lakh salary).

First work on your salary structure

During the beginning of the year, there is often an option to change the salary structure. You can decide by yourself how much money you need as reimbursement and how much money as taxable salary. In reimbursement, options like conveyance, LTA, food-coupon or entertainment, internet or phone bill and petrol are available. HRA plays an important role in saving tax. Let us know how you can save your tax with the help of all these.

First understand how much HRA can be benefited

When you are claiming HRA, you have to extract 3 types of figures. Whichever figure is the lowest among them, you get tax exemption on it.

• The HRA given by the company in the salary can be claimed.
• HRA can be claimed up to 50% of basic salary in metro cities and 40% of basic salary in non-metro cities.
• After deducting 10% of the basic salary from your total rent, you can claim that much HRA.

If you live in a metro city, then it is common to have a house rent of 15-20 thousand rupees in today’s time. Let us assume that your house rent is Rs 20,000, which is about 20% of your monthly salary. Whereas the basic salary is about 50% of your CTC, so let’s assume that your basic salary is around Rs 6 lakh. In such a situation, in the above mentioned 3 situations, your HRA will be something like this.

• Usually about 40 percent of the basic salary is received from the company as HRA. That is, you will get HRA of about Rs 2.4 lakh.
• Due to living in a metro city, you can take HRA up to 50% i.e. Rs 3 lakh.
• According to 20 thousand rupees, your annual rent is about 2.4 lakh rupees. From this, after deducting 10% of basic salary i.e. 60 thousand rupees, your amount comes to 1.8 lakh rupees.

Now if seen, Rs 1.8 lakh is the lowest among these three figures, so on this much money you can get exemption under HRA.

Leave travel allowance 

You can take advantage of this twice in 4 years. Under this, you can go somewhere and you can get the benefit of Leave Travel Allowance on the fare for commuting. Generally, about 10 percent of the basic salary is given by the companies as leave travel allowance. Now if you have a basic salary of Rs 6 lakh, then you will get a leave travel allowance of about Rs 60 thousand.

If you calculate the average on an annual basis, then you will get a tax exemption of about Rs 30,000. If leave travel allowance is not included in your salary, then get it included so that you can take advantage of it. Keep in mind, if you fall in the 30 per cent slab, you can save a lot of money with the help of LTA. It would not be wrong to say that with the help of LTA you will get 30 percent cheaper in a way.

Must get reimbursement

Many things are given to the employees by all the companies as reimbursement. Let’s know about each one by one and understand how much money you can save.

Conveyance Reimbursement: Under this, you can usually get a reimbursement of up to Rs 1-1.5 lakh from the company. Let us assume that your company gives you conveyance reimbursement of Rs 1.5 lakh, then this amount will become non-taxable to you.

Internet Bill:In today’s time, almost every business needs internet broadband. You can get good speed internet broadband for Rs 700-1000 per month. In such a situation, the company gives almost the same amount in reimbursement. If you do not have this component in your salary, then include it in your salary and get tax exemption. Let’s assume that under this you can make non-taxable up to Rs 1000 per month i.e. Rs 12000 annually.

Food or Entertainment Reimbursement: Earlier this reimbursement was in the form of food coupons, which can now be redeemed by showing your food bill. Under this, the company usually gives around 2000 rupees per month i.e. 24 thousand rupees easily annually.

Uniform, Fuel, Books & Others: Different companies also give some reimbursement in the name of uniform, fuel, books, magazine, paper etc. Talk to the HR of your company once and ask if these facilities are there. If you get these reimbursements, you will be able to save tax on some more money. Generally, by combining all these, you can get a reimbursement of up to Rs.1000-2000. Let us assume that you get reimbursement of only Rs.1000 per month, even then you will get the benefit of not paying tax on Rs.12,000 annually.

You also get many deductions

Under the Income Tax Act, you also get some deductions which prove to be helpful in reducing your taxable salary.

1- First of all, 50 thousand rupees will be given to every employed person.standard deduction Get. That means, whatever your salary, close your eyes and reduce 50 thousand rupees just like that.

2- Second largest deduction is available 80C of, under which you can get tax exemption on investment up to Rs 1.5 lakh. This includes PPF, Sukanya Samriddhi Yojana, NPS, child’s tuition fees, life insurance premium etc. Let us assume that you utilize this entire limit and claim a deduction of up to Rs 1.5 lakh.

3- After this 80CCD(1B) Under this, you get the benefit of investing an additional Rs 50,000 in NPS. So you can save some additional tax while securing your future.

4- In today’s time everyone takes health insurance. Section 80D Under this, you can save tax up to Rs 25,000 by taking health insurance for yourself. Also, by taking health insurance for parents, you will be able to save tax on Rs 25,000. That is, under this, your total deduction can be up to 50 thousand rupees. If your parents are above the age of 65, then you will get a deduction of Rs 50,000 for them. In this case, you will be able to save tax up to Rs 75,000. For the time being, assume that you will be able to save tax on a total of Rs 50,000 under 80D.

Now understand the calculation

There are total 4 parts of this calculation. The first is HRA, under which you will get tax exemption up to Rs 1.80 lakh. The second part is reimbursement. If you add all the reimbursements mentioned above, then you can get a total reimbursement of Rs. 1.98 lakhs. And the third part is the deduction. If you add the deduction available under all the sections, then you will get a total deduction of Rs 3 lakh. Apart from this, the fourth part is Leave Travel Allowance, on which you can take advantage only twice in 4 years. So if you calculate the average on an annual basis, then you will get a tax exemption of about Rs 30,000. That means, out of your salary, Rs 7.08 lakh will not be directly taxed.

Your annual salary was Rs 12 lakh, out of which Rs 7.13 lakh will not be taxed. In this case, your taxable salary is saved by Rs 4.92 lakh. Your taxable salary is less than Rs 5 lakh, so you will also get rebate under 87A on this. Explain that no one has to pay tax on salary up to Rs 2.5 lakh, while 5% tax is levied on salary ranging from Rs 2.5 to Rs 5 lakh, but if your total taxable salary is Rs 5 lakh or less, then the government will give you Gives rebate up to Rs 2.5 lakh, which means you don’t have to pay tax up to Rs 12,500. In this way all your tax becomes zero. Now your taxable salary has become Rs 4.92 lakh, which is less than Rs 5 lakh, so you will also get the benefit of this rebate and your tax liability will be zero (0).

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HRA will increase

According to the report of Zee News, house rent allowance for government employees can be increased soon. If this is the case, then there will be a significant increase in the salary of the employees. The HRA of government employees is based on the type of city they are working in. It is categorized in three ways X, Y and Z. X, Y, and Z. At present, the HRA of the employees falling in the Z category is 9% of their basic.

How much will be the increase in HRA

According to the report, the HRA of government employees may soon increase by 3 percent. Central government employees in X class cities are likely to get a 3 per cent hike in their HRA, while those in Y class cities may get only a 2 per cent hike and employees in Z class cities may get 1 per cent hike in their HRA. There may be an increase.

DA will also increase

Central employees have been waiting for July 1 for a long time because that was the date when their dearness allowance was to get a big hike. From July, all central government employees may see an increase in their DA. DA of central employees may increase from 42 percent to 46 percent. This means that there can be a jump of 4 percent in DA. The DA score for the month of May has been released. According to the AICPI index, there has been an increase of 0.50 points in the May score.

How is DA calculated?

The DA of central government employees is fixed on the basis of All India Consumer Price Index (AICPI). AICPI numbers are released at the end of every month. Based on these numbers, the DA score is revised after every 6 months. The CPI (IW) till 2001 = 100 was at 134.7 in May, while it came down to 134.02 in April. There has been a big jump of 0.50 points in the AICPI index.

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There is doubly good news for central employees. Not only is there going to be an increase in their Dearness Allowance, but an increase in their House Rent Allowance is also set. In such a situation, know what is the new update of increase in dearness allowance and house rent allowance of central employees and till when their DA and HR are expected to increase.

There is a possibility of increase in dearness allowance

At present, central employees are getting dearness allowance at the rate of 42 percent. According to the figures of inflation, it is expected to increase by 4 percent. However, only after the final figures from January to June come, it will be decided that how much DA will increase. There will be a review of dearness allowance and dearness relief in July 2023. If there is an expected 4 per cent increase in the DA of central employees, then their dearness allowance will increase to 46 per cent.

When will there be an increase in house rent allowance

According to the rules, when the dearness allowance crosses 50 per cent, then there will be an increase in the HRA of the employees. That is, after July 2023, when the next review of dearness allowance will take place in January 2024, then if the DA crosses 50 percent, then the HRA of the employees will increase.

Currently, the rates of HRA given to central employees are 27 per cent, 18 per cent and 9 per cent. These three categories are decided according to the city, which are divided into X, Y and Z.

How much will the House Rent Allowance increase

under the Seventh Pay Commission, the next revision in the House Rent Allowance will be three percent. That is, on crossing 50 percent of DA, the HRA of the employees falling in the X category will be 30 percent. HRA of Y category employees will be increased from 18 percent to 20 percent. Similarly, the HRA of Z category employees will increase from 9 percent to 10 percent.

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Many rules have increased. Including House Rent Allowance. You can also use the house rent allowance for tax saving. But for this you have to keep in mind the changes in income tax.

When will you get exemption of house rent allowance

HRA is given by the company to its employees. Under Section 10(13A) of the Income Tax Act, salaried people get exemption from house rent allowance. The tax payer gets the benefit of this only if he chooses the old tax regime. This benefit will not be available in the new tax regime. That is, if you want exemption of house rent allowance, then you have to choose the old tax regime.

HRA Exemption Rules

You get this benefit only when you live in a rented house. If you have your own house then you will not get its benefit. It is 50 percent of your basic pay or the amount of actual rent paid after 10 percent of basic pay, plus 50 percent of basic pay’s DA or 40 percent of DA, whichever is less. Yes, you get a discount on that.

Many people claim that they pay rent to their spouse to avail house rent allowance, so you cannot claim such exemption under the Income Tax Act. However, rent paid to parents is included in this. You will have to submit the rent receipt as proof.

Factors Affecting House Rent Allowance

• basic pay
• house rent allowance received from the company
• amount of actual rent paid
• Proof of Residence in Metro and Non Metro

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House Rent Allowance is one such tool, through which income tax can also be saved. HRA is exempt under section 10(13A) of the Income Tax Act, 1961 subject to certain conditions. The taxable income of a salaried person is calculated after deducting HRA. If an employee is living in his own house and does not pay rent for any house, then HRA is fully taxable.

The benefit of tax exemption in HRA is available only to salaried individuals. Along with this, it is also worth noting that the benefit of this exemption is available only to those who file income tax returns by choosing the old tax regime. Those opting for the new tax regime cannot avail tax deduction on HRA. It is also mandatory for HRA to be a part of the salary structure for tax exemption. People doing their own business do not get the benefit of this. HRA tax exemption depends on four factors. Salary (Basic Salary + DA), HRA component in salary, rent paid and location of rented accommodation.

How is HRA exemption calculated?

According to a report in India Today, Abhishek Soni, co-founder and CEO of Tax2win, says that a salaried person can avail HRA tax exemption on the amount he pays as house rent. Is. The calculation of HRA exemption depends on several factors. This exemption is given in the form of HRA, 50% of the salary (Basic Salary + DA) in metro cities and 40% for non-metro cities, paid more than 10% of the annual salary (Basic Salary + DA) Can be taken on the amount paid.

How to claim HRA exemption?

Sony says that to get HRA exemption, the employee has to submit the rent receipts and rent agreement to the employer. You need to submit Form 12BB to your employer to claim HRA exemption. This form contains the details of your paid rent, name of the landlord and PAN of the landlord. On paying rent above one lakh rupees annually, the employer has to give the PAN number of the landlord. An employee who lives in his parents’ house and pays rent is also entitled to HRA exemption.

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Now it is the turn of the second allowance to increase. The speed with which inflation is increasing will also increase the allowances received by the central government employees. Dearness Allowance (DA) is revised every 6 months. Now the next dearness allowance will increase on the CPI-IW data from January to June 2023. Experts are assuming that DA will increase in the future also in the head of 4% only. In such a situation, there can be a new announcement regarding HRA. House rent allowance of central employees can also be increased.

House Rent Allowance (HRA) will now increase

House rent allowance of central employees can also increase soon. This will happen because the government has already issued a notification for this. By the end of the financial year 2023-24, the HRA of the employees will also increase. However, this will happen only when the dearness allowance reaches 50%. Experts believe that the way dearness allowance has increased in the last two times. Looking at it, it seems that HRA revision will happen in March next year. Because, dearness allowance has reached 42%. If there is a jump of 4-4% for the next two times, then the dearness allowance will be 50%. When this happens, the revision of HRA will happen automatically.

Why is the HRA date confirmed?

Along with DA Hike, there is a jump in other allowances as well. The most important and important of these is the house rent allowance. In the year 2021, after July, the HRA was revised when the dearness allowance crossed 25%. In July 2021, the government had increased Dearness Allowance to 28 percent. The existing rates of HRA are 27%, 18% and 9%. The next revision is to be at 50%. Looking at the current situation, it is clear that there may be a 4% increase in dearness allowance in future as well. In this situation, HRA will be revised if DA is increased twice.

Employees will get tremendous benefits

According to DoPT, the revision in House Rent Allowance (HRA) for central employees (Kendriye Karamchari) is done on the basis of Dearness Allowance (DA). It is certain that by next year there will be a change in dearness allowance twice. Means after increasing in July 2023, DA will increase once more, which will be revised in March next year. In such a situation, there is every possibility of HRA crossing 50%. If this is to be believed, then the HRA will increase in the beginning of the year 2024 itself.

By how much will the HRA of central employees increase?

The current rate of HRA is 27%, 18% and 9% depending on the city category. This increase is applicable from 1 July 2021 along with DA. The government had said in a memorandum released in 2015 that HRA will be revised from time to time along with DA. The next revision in house rent allowance will be 3%. The maximum rate will increase from the existing 27% to 30%. But, this will happen when the Dearness Allowance (DA Hike) will be 50%. When DA crosses 50%, HRA will be 30%, 20% and 10%.

Who will get how much HRA?

The category of House Rent Allowance (HRA) is according to X, Y and Z class cities. The central employees who fall in the X category are getting 27% HRA, which will become 30% if DA is 50%. At the same time, for Y class people, it will increase from 18% to 20%. For Z class people it will be increased from 9% to 10%.

How much money will increase if HRA is increased?

Under the 7th Pay Commission, the maximum basic salary according to pay-grade at Level-1 of central employees is Rs 56,900 per month, then its HRA is calculated according to 27%. If you understand from simple calculation…

– HRA= Rs 56,900 x 27/100= Rs 15,363/month
– 30% HRA = Rs 56,900 x30/100= Rs 17,070/month
– Total difference in HRA: Rs 1707/month
– Annual HRA increase – Rs 20,484

How much will the salary of central employees increase?

Now if you understand according to the above calculation, then the maximum salary at level-1 is 56900. But, HRA will be 30% only if the total DA is 50%. In such a situation, there will be a big difference in the salary of central employees.

– Basic Salary: Rs 56,900
– Dearness Allowance (DA): 42%= Rs 23,898 per month
– HRA 27%: Rs 15,363 per month
– Total Salary: Rs 96,161/month

On revision of DA and HRA

– Basic Salary: Rs 56,900
– Dearness Allowance (DA): 50%= Rs 28,450 per month
– HRA 30%: Rs 17,070 per month
– Total Salary: Rs 1,02,420/month
– Net Salary: Rs 6,259/month

Note: Salary has not been calculated here according to other allowances and other salary structure. This is just for the purpose of explaining. The difference in salary can be huge if the rest of the allowance is added.

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This travel allowance is provided by the employer and is mentioned in the salary package. If you are also given LTA by the company, then you can also take tax exemption on it. Tax exemption is available on LTA under section 10(5) of the Income Tax Act 1961. But there are some conditions about which every employee should know.

These are the rules regarding LTA

• For tax exemption on LTA, only those journeys can be included in the expenses which are done within the borders of India. The cost of traveling abroad is not included in this.
• You must be on leave from the company at the time you are including the travel expenses for LTA and this leave must be mentioned in the records of the company.
• In LTA, you can include the travel expenses of yourself, your life partner and two children. Apart from this, siblings or parents dependent on you can be included.
• In LTA, you can include the cost of rail travel, air travel, bus travel etc. i.e. the fare of any government or other recognized transport. Private car, cab, food and drink, stay and sightseeing expenses cannot be included in this. 
• If you are on a business trip and have taken your life partner and child along with you, then you will not get the benefit of LTA.

Tax exemption rules

• You cannot take tax exemption on LTA every year, in this tax exemption can be taken twice in 4 years. For this, the Income Tax Department has already fixed a block of four years each. If both you and your wife are employed and both are provided with LTA facility by the company, then the family can travel every year. In this case, both husband and wife can get tax-free money every year for two different calendar years.
• If for any reason you are not able to take tax exemption in the concerned block, then tax exemption can be taken in the next block on subsequent holiday travel. But, you will have to take such tax exemption in the first year of the next block itself. In this case, you can use the expenses of three leisure journeys in the next block for LTA tax exemption.
• There is one more thing to be understood regarding tax, that if the employer has given you LTA up to 1 lakh, but your travel expenses are 50 thousand rupees, then the exemption will be available only for 50 thousand rupees. If your expenditure is Rs 1.2 lakh, then the exemption amount will be Rs 1 lakh.

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Significantly, last year these forms were issued in the first week of April. Many types of investments help you to save income tax. One of these is House Rent Allowance ie HRA. If you are a salaried employee then you can take advantage of this. Let us tell you that to save tax, you can take advantage of HRA only in the old tax system. This will not be available in the new tax system.

Will get benefit in these circumstances

House rent allowance ie (HRA) in salary is a part of taxable income. Income tax is exempted under section 10 (13A) of the Income Tax Act. Keep in mind some circumstances for how much tax can be saved from HRA. In the situation in which the minimum amount will come, you can take advantage of tax exemption of HRA.

In the first situation, first of all, you should see how much HRA is there in the salary. HRA is 50% of the basic salary in metro cities and 40% of the salary in non-metro cities. The third condition is the amount left after deducting 10% of the annual salary from the annual house rent.

This is how you can save

You can understand how much you can save in HRA through an example. A person works in Delhi and lives in a rented house. His rent goes to 15 thousand rupees every month. He gets a maximum of one lakh rupees as HRA annually from his company. At the same time, his basic salary is 25 thousand rupees and dearness allowance is two thousand rupees. In this way, a salaried person can save a maximum of one lakh rupees.

These documents are necessary

To get exemption through house rent allowance, you must first have a rent agreement. Monthly rent, fixed time limit of the agreement, and expenses should be mentioned in this agreement. This rent agreement should be in stamp paper of Rs 100 or Rs 200. On the other hand, if the annual rent is more than one lakh rupees, then it is also necessary to have the PAN card of the landlord.

Apart from this, you should also have a receipt for paying the rent. Let us tell you that if your annual income is up to Rs 50 lakh, then you will have to fill Form 1 for ITR filing. Those earning more than 50 lakhs will have to fill ITR Form 2.

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Housing Rent Allowance

Salary class employees believe that the calculation of House Rent Allowance (HRA) needs to be changed in the definition of metro cities. At present, Delhi, Mumbai, Kolkata, Chennai are called metro cities. Employees in these cities get benefits by way of HRA deduction. However, there is a demand from people of other cities like Bangalore, Pune to get the same benefits.

Change in tax slab

At present, two types of options have been provided to taxpayers while filing taxes. Through which his income is tax free up to Rs 2.5 lakh. At the same time, tax rebate is also available on income up to Rs 5 lakh. In such a situation, the people of the salary class are expecting that in this year’s Union Budget, the government will increase the basic tax exemption from Rs 2.5 lakh to at least Rs 5 lakh.

Expectations of common people

The general budget is going to be presented soon in the country. People have a lot of expectations before the budget. This time people have some special expectations from the budget. The reason for this is that this is the last full budget of Modi government 2.0. Meanwhile, salaried employees form the largest group of taxpayers in the country. In such a situation, getting some relief to these people in the budget can have a big impact on this group.

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According to the new rules implemented, now only some center employees will be eligible for House Rent Allowance. Actually, the Central Government provides the facility of house rent to its employees to live in a rented house, but now the Ministry of Finance under the Central Government has made some updates in the rules of HRA. This change has been made by the Department of Expenditure (DoE) of the Ministry of Finance.

These are the new rules

According to (DoE), the House Rent Allowance (HRA) rules for government employees have been updated. As per the updated rules, a government servant will not be eligible for HRA in certain cases. As per the new rule in force, an employee will not be entitled to HRA if he shares a government accommodation allotted to another government employee. That worker will not get the house rent of the government.

Further, as per the new rule, if an employee is staying with his parents/son/daughter in the accommodation allotted by the Central, State Government, Autonomous Public Sector Undertaking and Semi-Government organization like Municipality, Port Trust, Nationalized Bank, LIC etc. If he is living together then he too will not get the house rent.

Husband wife will not get house rent even at government residence

If the spouse of a Government Servant resides in the same station as the Government Servant in accommodation provided by any of the above institutions or separately, he/she shall not be entitled to HRK. In this situation, the government will not give house rent to that employee.

Housing allowance is available in three categories

The central government is for salaried people who live in rented houses and is divided into three categories for housing related expenses. These three categories are X, Y and Z. The ‘X’ category is for areas with a population of 50 lakhs and above. As per the recommendation of the Seventh Central Pay Commission (CPC), HRA is given at 24%. In ‘Y’ category, the government provides 16 per cent house rent for areas with a population between 5 lakh and 50 lakh. While in the ‘Z’ category, the government provides 8 percent house rent in areas with a population of less than 5 lakhs.

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If a salaried person lives in a rented house, he gets house rent allowance. Tax exemption is also available on HR. House rent allowance is a significant part of the salary.

The Finance Ministry has informed about the changes in the HRA rules of central government employees. In such a situation, if you are an employee of the Central Government, then you should know that now what conditions you have to follow to get HRA. According to the new rules, now if the employee shares the government accommodation given to another government employee, then they are not entitled to get HRA.

Even if the employee’s parent, son or daughter has been allotted a house by the Central or State Government, Public Sector Undertaking and Semi-Government Organization like Municipal Corporation, Port Trust, Nationalized Bank, LIC etc. and he is living in it Now house rent allowance will not be available.

HRA will not be available even if the husband or wife has got a government
house. Will not pay rent.

What is HRA

HRA or House Rent Allowance is a part of the salary of an employee which is given by the employer for the expenses incurred for the rented accommodation. HRA claim can only be made by a salaried person. The house in which the salaried individual is staying should be on rent. You don’t get the benefit of living in your own house. HRA is available only when the rent is more than 10% of the salary.

The government gives this much HRA

Any government salaried person who is living in a rented house, the expenses related to his house are divided into 3 categories, X, Y and Z.. ‘X’ category 50 lakh and above population is for area. Here HRA is given 24% under the 7th Pay Commission. ‘Y’ stands for area with population between 5 lakh to 50 lakh. Here 16 percent HRA is given. Where the population is less than 5 lakhs, it comes in Z category and 8 house rent allowance is given.

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7th Pay Commission News : The Department of Expenditure ( DoE ) under the Ministry of Finance has updated the House Rent Allowance ( HRA ) rules for central government employees . Now according to the new rules, in some cases government employees will not get HRA . These government employees will not be eligible for HRA.

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Employees will get the benefit of increased DA at the beginning of the new year itself. Apart from this, the government can give verdict on 3 big issues related to the employees.

All these decisions are related to salary only. The government can take a decision on the long-running fitment factor in the year 2023. Experts say that before the 2024 Lok Sabha elections, the government can give the gift of fitment factor to the central government employees. Apart from this, a decision can also be taken on dearness allowance and old pension scheme.

The decision will be taken on the fitment factor.

The government can give the biggest gift ever to the Central Government Employees in the new year. First dearness allowance, HRA, TA, after promotion, fitment factor can also be discussed next year. If sources are to be believed, the government can directly consider increasing the salary of the employees by Rs 8000. Actually, increasing the fitment factor will strengthen the base of government employees. At present, the employees get Rs 18000 as minimum wage under the 7th pay commission. The government can take a decision on this demand of central employees after the budget to be presented on February 1, 2023 next year.

Dearness allowance will increase again

The dearness allowance of central employees is reviewed every 6 months. On the basis of AICPI data, dearness allowance is increased twice a year. This growth happens in January and July. Like every year, in the year 2023 also there will be an increase in the dearness allowance of central employees. Dearness allowance for January 2023 will be announced before March. Looking at the inflation figures so far, it seems that next year also 4 percent DA Hike can happen. However, the AICPI index numbers for October, November and December are yet to come.

Will get the benefit of the old pension scheme!

Next year, the government can give a big gift of old pension to the central employees. In the year 2023, the Old Pension Scheme can be implemented. In fact, there has been a demand from the employees for a long time that the old pension should be implemented. Let us tell you that some states have also implemented the old pension keeping the election promises.

The Punjab cabinet has also approved it. Actually, for this, the Central Government had sought opinion from the Ministry of Law regarding the old pension scheme. If sources are to be believed, under the 7th Pay Commission, the Modi government can implement it for central employees before the year 2024.

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Central employees are going to get many good news in the new year. In the beginning of the year 2023 itself, the government can give its consent on many big decisions. Employees will get the benefit of increased DA at the beginning of the new year itself. Apart from this, the government can give verdict on 3 big issues related to the employees.

The connection of all these decisions is with Salieri. The government can take a decision on the long-running fitment factor in the year 2023. Experts say that before the 2024 Lok Sabha elections, the government can give the gift of fitment factor to the central government employees. Apart from this, a decision can also be taken on dearness allowance and old pension scheme.

The decision will be taken on the fitment factor.

The government can give the biggest gift ever to the Central Government Employees in the new year. First dearness allowance, HRA, TA, after promotion, fitment factor can also be discussed next year. If sources are to be believed, the government can directly consider increasing the salary of the employees by Rs 8000. Actually, increasing the fitment factor will strengthen the base of government employees. At present, the employees get Rs 18000 as minimum wage under the 7th pay commission. The government can take a decision on this demand of central employees after the budget to be presented on February 1, 2023 next year.

dearness allowance will increase again

The dearness allowance of central employees is reviewed every 6 months. On the basis of AICPI data, dearness allowance is increased twice a year. This growth happens in January and July. Like every year, in the year 2023 also there will be an increase in the dearness allowance of central employees. Dearness allowance for January 2023 will be announced before March. Looking at the inflation figures so far, it seems that next year also 4 percent DA Hike can happen. However, the AICPI index numbers for October, November and December are yet to come.

Will get the benefit of the old pension scheme!

Next year, the government can give a big gift of old pension to the central employees. In the year 2023, the Old Pension Scheme can be implemented. In fact, there has been a demand from the employees for a long time that the old pension should be implemented.

Let us tell you that some states have also implemented the old pension keeping the election promises. The Punjab cabinet has also approved it. Actually, for this, the Central Government had sought opinion from the Ministry of Law regarding the old pension scheme. If sources are to be believed, under the 7th Pay Commission, the Modi government can implement it for central employees before the year 2024.

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The new year is bringing many good news for central employees. In the year 2023, the government can give its consent on many big decisions. At the beginning of the new year itself, the employees will get the benefit of increased DA. Apart from this, the government can decide on 3 big issues related to the employees.

The biggest advantage among these is related to salary. There is a long standing demand for fitment factor. The government can take a decision on this in the year 2023. Experts say that before the 2024 Lok Sabha elections, the government can give the gift of fitment factor to the central government employees. Apart from this, a decision can also be taken on dearness allowance and old pension scheme.

When will the fitment factor increase?

In the new year, Central Government Employees can get the biggest gift ever. First dearness allowance, HRA, TA, after promotion, fitment factor can also be discussed next year. If sources are to be believed, the government can directly consider increasing the salary of the employees by Rs 8000. Actually, increasing the fitment factor will strengthen the base of government employees. At present, the employees get Rs 18000 as minimum wage under the 7th pay commission. The government can take a decision on this demand of central employees after the budget to be presented on February 1, 2023 next year.

Dearness allowance will increase again in the new year

The dearness allowance of central employees is reviewed every 6 months. On the basis of AICPI data, dearness allowance is increased twice a year. This growth happens in January and July. Like every year, in the year 2023 also there will be an increase in the dearness allowance of central employees. Dearness allowance for January 2023 will be announced before March. Looking at the inflation figures so far, it seems that next year also 4 percent DA Hike can happen. However, the AICPI index numbers for October, November and December are yet to come.

Will get the benefit of the old pension scheme!

Next year, the government can give a big gift of old pension to the central employees. In the year 2023, the Old Pension Scheme can be implemented. In fact, there has been a demand from the employees for a long time that the old pension should be implemented. Let us tell you that some states have also implemented the old pension keeping the election promises.

The Punjab cabinet has also approved it. Actually, for this, the Central Government had sought opinion from the Ministry of Law regarding the old pension scheme. If sources are to be believed, under the 7th Pay Commission, the Modi government can implement it for central employees before the year 2024.

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Dearness Allowance (DA Hike) of central employees is increased twice a year under the Seventh Pay Commission. How much DA will increase, it depends on the AICPI Index. Many countries around the world are facing the problem of inflation.

Regarding inflation in the country, RBI has expressed apprehensions that inflation may increase further in the coming times. This is the reason why RBI is going to do monetary policy ahead of time this time in November. But if we talk differently from inflation, then it is easy to increase good dearness allowance in the coming time.

Dearness Allowance likely to increase by 4 percent

In the last week of September, an increase of 4 percent in Dearness Allowance (DA Hike) has been announced. It has been implemented from 1st July 2022. The next revision in DA will be from January 2023. Experts say that due to the situation of inflation, dearness allowance may again increase by 4 percent in the coming days. It is expected that the dearness allowance will increase to 42 percent in January.

Dearness allowance has been reduced to zero in 2016, the rule of dearness allowance is that as soon as it reaches 50 percent, it will be reduced to zero. When the 7th Pay Commission came into force in 2016, dearness allowance was reduced to zero. According to 50 percent, the money that the employees will be getting as allowance, will be added to the basic salary. For example, if the basic salary is Rs 18000, he will get 50 percent DA of Rs 9000. But after 50 percent, adding it to the basic salary, the dearness allowance will again be reduced to zero.

This work done in 2016 The experts also say that the rule is that the entire DA received by the employees should be added to the basic salary. But in doing so many times financial situation comes in the way. However, this was done in 2016. In the year 2006, when the 6th pay scale was implemented, 187 percent DA was being available till December in the fifth pay scale. The full DA was merged with the basic pay.

3 percent HRA will also increase

The next revision in House Rent Allowance (HRA) will also be of 3 percent. HRA will be increased to 30 percent from the existing maximum rate of 27 percent. But, this is possible only when Dearness Allowance (DA) crosses 50%. According to the memorandum, if DA crosses 50%, HRA will become 30%, 20% and 10%. The category of House Rent Allowance (HRA) is according to the X, Y and Z class cities.

Central employee falling in X category is getting 27% HRA, it will be 30% if 50% DA. At the same time, for Y category people, it will increase from 18 percent to 20 percent. For Z category people it will increase from 9 percent to 10 percent.

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Central employees are going to get good news once again. The government has increased the DA, along with this, now another allowance is being considered to increase. If this happens, then there will be a big increase in the salary of the employees. According to the information, HRA hike can also be announced along with DA hike. Actually, with the increase in DA, revision in HRA is also expected.

Central employee can get good news

The DA of central government employees and pensioners has been increased by 4%. That is, from this month employees will get increased salary. Along with this, an increase in HRA can also be announced soon. Earlier, the HRA was increased in July last year. Then the DA was also increased to 28 percent. Now that the DA has become 38 percent, then the HRA can also be amended.

How HRA is Determined

Now let us see how HRA is decided for government employees. Let us tell you that the cities whose population is more than 50 lakhs come under the ‘X’ category. At the same time, those whose population is more than 5 lakhs, they come in the ‘Y’ category. And cities with a population of less than 5 lakhs come under the ‘Z’ category. The minimum HRA for all three categories will be Rs 5400, 3600 and Rs 1800.

How much can HRA increase

Accordingly, the HRA of the employee is determined by the category of the city where they work. According to media reports, the HRA of government employees living or working in X category cities is likely to increase by 4 to 5 percent, similar to DA. At present, the employees of these cities get HRA of 27 per cent of the basic salary. At the same time, 2 percent increase in HRA is possible for Y category cities. At present, these employees get 18-20 per cent HRA. At the same time, 1 percent HRA can be increased for Z category cities. They are currently given HRA at the rate of 9-10 per cent.

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7th Pay Commission Salary calculation: Dearness allowance of central employees has increased. With the increase in dearness allowance, there is also a difference in the total gross salary. Pay matrix has been prepared according to every department in the 7th Pay Commission. There are different pay scale levels in the pay matrix. They all have different salary. The 7th Pay Commission was implemented for government employees from January 1, 2016, after that there was a change in their salary structure. Gross salary increased by about 14% in the new pay scale. However, after this the Modi government also started adding DA to it, due to which there was a further difference in salary. According to his pay matrix, any employee can calculate his salary.

7th pay commission got a big advantage as compared to 6th pay commission

The basic pay at the entry level in the sixth pay scale was Rs 7000 (pay band 5200 + grade pay 1800). At the same time, DA was available at 125%, meaning more DA was made than the basic. Including the rest of the allowances and deductions, the employee used to get Rs 14,757 a month. But, after the implementation of the 7th pay scale, there was a big increase in the monthly gross-pay. DA was revised to zero again. At present, the employees are getting 38% dearness allowance, which has been implemented from July 2022.

How much salary changed on changing pay commission?

6th Pay Commission 7th Pay Commission
7000 18000
13500 35400
21000 56100
46100 118500
80000 225000
90000 250000

Pay metrics linked to fitment factor

Salary is made on the basis of Pay Matrix. In the new pay scale, the pay matrix was linked to the fitment factor. The initial level employee gets 2.57 times the salary on the basis of fitment factor. Means the basic is 18 thousand rupees per month at level 1 in the pay matrix. At the same time, at level 18, it is Rs 2.5 lakh per month. This arrangement is effective from 1 January 2016.

What is the pay scale in Level-3?

First understand what is Pay Matrix and how does it affect the salary of employees? And how do government employees get benefits. The pay-grade is fixed on the basic salary of the Pay Matrix Level 3 under 7th Pay. At present, the basic pay structure in level-3 is minimum Rs 21,700 and maximum or Rs 69,100 with 40 increments.

Understand the salary structure of Level-3 like this

Lets understand by example. If any government employee comes under Pay Matrix Level 3 in any department. His basic basic salary is Rs 21,700, so let us know what will be the total salary of that employee?

• Level and Grade-Pay: Level-3 (Grade-Pay-2000)
• Location: Delhi
• Basic Pay: Rs 21,700
• Dearness Allowance (DA): Rs.8246 (38% of Basic Pay)
• House Rent Allowance (HRA): Rs 5,859 (27% / X city)
• Traveling Allowance: Rs 4,716 (TA of Level-3 for A1 Class Cities)
• Gross Salary: Rs 40,521

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Along with this, now another allowance is being considered to increase. According to the information, HRA hike can also be announced along with DA hike. Actually, with the increase in DA, revision in HRA is also expected.

Five important things of the notification issued by the government that the employees of the central government should know:-

1. New Rates

The rate of Dearness Allowance payable to Central Government employees has been increased from 34% to 38% of basic pay with effect from July 1, 2022. In other words, DA has been increased by 4%.

2. Calculation of DA on Basic Pay

For salary calculation under 7th Pay Commission, DA has to be calculated on the basic salary of the employee. Suppose the minimum basic salary of a central employee is Rs 25,000, then his dearness allowance will be 38% of 25,000. Basic pay does not include any other type of pay like special pay etc.

3. Dearness Allowance will not be treated as pay under

FR 9(21). As per the notification, Dearness Allowance will continue to be a distinct element of remuneration and will not be treated as pay within the scope of FR 9(21).

4. Understand Calculations

OM Accordingly, in payment of dearness allowance, fractions of 50 paise and above may be rounded off to the next higher rupee and fractions less than 50 paise may be ignored.

5. Separate orders will be issued for Railway, Defense personnel. Separate orders will be issued

by the Ministry of Railways and Ministry of Defense regarding the revised rate of Dearness Allowance for Armed Forces personnel and Railway employees. Dearness Allowance is given to the government employees of the Center and the states to improve their cost of living level. Even after rising inflation, the standard of living of the employee does not matter, so this allowance is a part of the salary structure. Dearness allowance (DA) is given to government employees, public sector employees dearnessand  relief to pensioners.

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This is how HRA is fixed

Let us tell you that the cities whose population is more than 50 lakhs come under the ‘X’ category. At the same time, those whose population is more than 5 lakhs come under ‘Y’ category and cities with population less than 5 lakhs come under ‘Z’ category. HRA for government employees is determined by the category of the city in which they work.

HRA has three categories

These are the three categories X, Y and Z. Class X employees are getting HRA at the rate of 27% of their basic salary. The Y category gets HRA at the rate of 18 to 20 percent. Whereas, the Z category gets HRA at the rate of 9 to 10 per cent. This rate varies by area and city. The minimum HRA for all the three categories is Rs 5400, 3600 and Rs 1800.

HRA can increase this much

According to reports, HRA of government employees may soon increase to 3 percent. Employees in X category cities may see a 3 per cent hike in their HRA, while those in Y category cities may see a 2 per cent hike in their allowances. Apart from this, the HRA of employees in Z category cities can also increase by 1 percent.

Now getting HRA at this rate

At present, central employees are getting HRA at the rate of 27, 18 and 9 per cent. In July last year, HRA was revised when DA crossed 25 per cent and when DA was increased to 28 per cent in July 2021 and then HRA was revised even if DA crossed 25 per cent. Now the DA of central employees has increased from 31 percent to 34 percent, so it is expected that soon the HRA can also be increased by 3 percent.

Modi government increased DA

Let us tell you that on September 28, the Central Government had announced an increase of 4 percent in the dearness allowance of central employees. Due to this dearness allowance has increased from 34 to 38 percent. Is. 50 lakh employees and about 62 lakh pensioners have benefited from this decision of the central government.

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38% may be DA

The DA of central government employees and pensioners has been increased by 4%. That is, from this month employees will get increased salary. Along with this, an increase in HRA can also be announced soon. Earlier, the HRA was increased in July last year. Then the DA was also increased to 28 percent. Now that the DA has become 38 percent, then the HRA can also be amended.

How HRA is Determined

Now let us see how HRA is decided for government employees. Let us tell you that the cities whose population is more than 50 lakhs come under the ‘X’ category. At the same time, those whose population is more than 5 lakhs, they come in the ‘Y’ category. And cities with a population of less than 5 lakhs come under the ‘Z’ category. The minimum HRA for all three categories will be Rs 5400, 3600 and Rs 1800.

How much can HRA increase

Accordingly, the HRA of the employee is determined by the category of the city where they work. According to media reports, the HRA of government employees living or working in X category cities is likely to increase by 4 to 5 percent, similar to DA.

At present, the employees of these cities get HRA of 27 per cent of the basic salary. At the same time, 2 percent increase in HRA is possible for Y category cities. At present, these employees get 18-20 per cent HRA. At the same time, 1 percent HRA can be increased for Z category cities. They are currently given HRA at the rate of 9-10 per cent.

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However, a formal announcement is yet to be made. But, there is speculation that it can be implemented in the coming months. The matter is that whenever it is implemented, the biggest change will be seen in the salary structure. Till now you must have heard that your in hand salary will be reduced in the salary structure with the coming of new labor law. Because, the basic salary will be 50%.

This will cut more money into the retirement fund. The huge amount of allowances will be reduced. Now here is the twist. Even after the new salary structure comes, your in hand salary will not decrease but will increase. Let’s understand how…

Basic salary will be 50%

First understand that the government has prepared 4 new labor codes by adding 29 labor laws. According to the provisions of the new law, the basic salary will be 50% of the total salary (CTC) in the salary that companies will pay to their employees. This means that the basic salary which used to be 30-35 percent earlier, will be increased by 15 percent directly and the reimbursement-allowance part will remain 50 percent.

What is in the current salary structure?

Suppose your monthly salary is an annual package of Rs 1.5 lakh i.e. Rs 18 lakh. In the current salary structure, the basic salary is 32% of the CTC. In this sense, in the monthly CTC of 1.50 lakh, the basic salary will be Rs 48,000. Then 50 percent i.e. Rs 24,000 HRA then 10% of basic (Rs 48,000) in NPS i.e. Rs 4,800 will go. 

If 12% of the basic salary goes to the Provident Fund (PF), then Rs 5,760 will go to the EPF every month. In this way your monthly CTC of Rs 1.50 lakh has become Rs 82,560. This means that the remaining Rs 67,440 is being given through other items. These include components like special allowance, fuel and transport, phones, newspapers and books, monthly share in annual bonus, gratuity.

Whose share in the current salary structure

How much tax is made, how much is the salary in hand and how much is retirement savings?

• Out of your total CTC, Rs 1.10 lakh will be taxed. That means 6.14 percent tax of CTC.
• Take home salary – Rs 1.14 lakh, 76.1 percent of CTC.
• Retirement savings – Rs 1.96 lakh, totaling 10.9 percent of CTC.

With the implementation of the New Wage Code, there will be a change in the salary structure of the employees. Think of it like this-

How much tax, how much salary in hand and how much will be retirement savings?

• Out of your total CTC, Rs 1.19 lakh will be taxed. That means 6.6 percent tax of CTC.
• Take home salary – Rs 1.06 lakh, 70.4 percent of CTC.
• Retirement savings- Rs 3.06 lakh, 17 per cent of the total CTC.
• In the new structure, your annual retirement savings will be Rs 3.06 (17% of CTC) as against Rs 1.96 lakh (10.9% of CTC) earlier. Meaning, your annual retirement savings will increase by Rs 1.10 lakh under the new structure.

HRA will get less tax exemption

According to the new rule, suppose the annual basic salary is Rs 9 lakh, then the HRA will be Rs 4,50,000. But, you will get tax exemption only on the exemption of Rs 2,42,400. Meaning tax will have to be paid on Rs 2,07,600. Earlier, you had to pay tax on only Rs 45,600 received under the head of HRA. There is going to be a huge increase in tax on HRA in the new salary structure. If you compare the tax on annual CTC, now you have to pay tax of 1.10 lakh (6.1% of total CTC), which will be Rs 1.19 lakh (6.6% of total CTC) in the new structure.

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Apart from this, revision in HRA of central employees will also be done on time. Its benefit will be more than 47.68 lakh central employees and more than 68.52 lakh pensioners. There will be a jump in salary from 20 thousand to 2.50 lakh.

Dearness allowance will increase by 4%?

The Modi government at the Center can announce an increase in 4% dearness allowance and dearness relief for the second half in August.

After the release of the June data of the AICPI index, it is believed that the DA of the employees will increase by 4 to 5%. If it is implemented from July 1, then the arrears of July-August will also be available.

If the basic salary of a central employee is Rs 20,000 per month, then at the current rate of 34 per cent, he is getting DA of Rs 6,800 per month, then at 38 per cent, the amount will increase by Rs 800 per month to 7,600. That is, you will get a profit of Rs 9,600 annually, according to this, the annual DA of an employee with basic salary of Rs 20,000 will be Rs 91,200.

If we look at the maximum basic salary of Rs 56,900, then the total increase in annual dearness allowance will be Rs 27312. That means Rs 2276 will increase every month against the existing DA. His total annual DA will reach Rs 2 lakh 59 thousand 464.

Fitment factor also expected to increase

According to the recent reports, along with DA, HRA, central employees have been waiting for an increase in the fitment factor for a long time. Now that the increase in DA has been announced, then their hope has got wings.

It is expected that soon the government can also take a big decision on the fitment factor of central employees. The fitment factor plays an important role in the salary received by the employees. Due to this factor, the salary of central employees increases by more than two and a half times.

Possible increase in house rent allowance?

Currently, HRA rates are 27%, 18% and 9% depending on the category of the city, it is possible to increase it up to 3%. It is believed that soon the HRA of X category employees can be increased by 3 percent, Y category HRA by 2 percent and for Z category 1 percent HRA can be increased. Thereafter, it will increase from 27% to 30%, although this will be in case the DA rises from 34 per cent to 50 per cent.

According to the 7th Pay Matrix, the maximum basic salary of employees is Rs 56,900, then if HRA is 27 percent, there will be a profit of 20,484 in the salary. For example, house rent allowance is Rs 56900 x 27/100 = Rs 15363 per month, then 30% HRA If it is Rs 56,900 x 30/100 = Rs 17,070 per month, that means the total difference will be Rs 1707 per month.

The annual HRA will increase by Rs 20,484. These rates vary according to the area and city, currently the minimum HRA for all three categories is Rs 5400, 3600 and 1800. According to the same 7th Pay Matrix, the minimum salary of employees is Rs 18000 and maximum basic salary is Rs 56,900.
rising demand to increase

It is worth noting that there has been a long-standing demand of central employees to increase their fitment factor from 2.57 per cent to 3.68 per cent. After this, there will be a tremendous increase in the minimum salary of the employees.

Let us tell you that the last time the fitment factor was increased in the year 2016. The 7th Pay Commission was also implemented in the same year. At that time the minimum salary of the employees had gone straight from Rs 6000 to Rs 18,000.

Now the government can increase the salary of central employees again this year. The fitment factor decides the basic salary for all central government employees. This time, if there is a possible increase in the fitment factor, then the minimum basic pay will increase from Rs 18,000 to Rs 26,000.

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Along with increasing DA, the amount of PF and Gratuity of the employees will also increase. At the same time, City and Travel Allowance will also increase.

Apart from this, revision in HRA of Central Employees will also be done on time. Its benefit will be more than 47.68 lakh central employees and more than 68.52 lakh pensioners. There will be a jump in salary from 20 thousand to 2.50 lakh.

Dearness allowance will increase by 4%?

• The Modi government at the Center can announce an increase in 4% dearness allowance and dearness relief for the second half in August. After the release of the June data of the AICPI index, it is believed that the DA of the employees will increase by 4 to 5%. If it is implemented from July 1, then the arrears of July-August will also be available.
• If the basic salary of a central employee is Rs 20,000 per month, then at the current rate of 34 per cent, he is getting DA of Rs 6,800 per month, then at 38 per cent, the amount will increase by Rs 800 per month to 7,600. That is, you will get a profit of Rs 9,600 annually, according to this, the annual DA of an employee with basic salary of Rs 20,000 will be Rs 91,200.
• If we look at the maximum basic salary of Rs 56,900, then the total increase in annual dearness allowance will be Rs 27312. That means Rs 2276 will increase every month against the existing DA. His total annual DA will reach Rs 2 lakh 59 thousand 464.

18 Months DA Arrear to be paid?

• The outstanding DA arrears of 18 months of central employees-pensioners (7th Pay Commission Central Government employees) can also be considered. In this regard, a meeting of the Joint Advisory Mechanism (JSM) of the officers of the Department of Personnel and Training and Department of Expenditure (DOPT) of the Ministry of Finance may be held soon. However, the official confirmation is yet to be done. will get accordingly.
• If calculated for Level-13 (7th CPC basic pay scale Rs 1,23,100 to Rs 2,15,900) or Level-14 (pay scale), dearness allowance arrears in the hands of an employee is Rs 1,44,200 to 2 Rs 18,200 will be paid.
• If the employee’s basic salary is Rs 18,000, he can get arrears of DA for 3 months (4,320+3,240+4,320) = Rs 11,880. If the employee’s basic salary is Rs 56,000, he can get 3 months (13,656 + 10,242 + 13,656) ) = Rs 37,554 DA arrears. Level-13 (7th CPC basic pay scale Rs. 1,23,100 to Rs. 2,15,900). Level-14 (pay-scale) will get DA arrears of Rs. 18,200 Rs.

Possible increase in house rent allowance?

Currently, HRA rates are 27%, 18% and 9% depending on the category of the city, it is possible to increase it up to 3%. It is believed that soon the HRA of X category employees can be increased by 3 percent, Y category HRA by 2 percent and for Z category 1 percent HRA can be increased. Thereafter, it will increase from 27% to 30%, albeit in case the DA rises from 34 per cent to 50 per cent.

According to the 7th Pay Matrix, the maximum basic salary of employees is Rs 56,900, then if HRA is 27 percent, there will be a profit of 20,484 in the salary. For example, if the house rent allowance is Rs 56900 x 27/100 = Rs 15363 per month, then 30% HRA If it is Rs 56,900 x 30/100 = Rs 17,070 per month, that means the total difference will be Rs 1707 per month.

The annual HRA will increase by Rs 20,484. This rate varies according to the area and city, currently the minimum HRA for all three categories is Rs 5400, 3600 and 1800. According to the same 7th Pay Matrix, the minimum salary of the employees is 18000 and the maximum basic salary is Rs 56,900.
These allowances will also increase

According to media reports, along with dearness allowance, employees will also get the benefit of House Rent Allowance, Travel Allowance, Provident Fund, City Allowance and Gratuity.

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1. Employees’ Provident Fund (EPF)

According to the EPF Act, the company invests 12 percent of the basic salary and allowances of the employee in EPF. The company also has to invest the same amount. The employee’s contribution is tax exempt, which is up to Rs 1.5 lakh. This exemption is available under section 80C of the Income Tax Act. Interest earned on this also comes under the purview of tax exemption.

2. Leave Travel Allowance (LTA)

For the employees to travel anywhere in the country with their family, companies provide Leave Travel Allowance, which is tax exempt. This discount is available only on travel by train, airplane or public transport. In this, the shortest distance to reach the destination is made the basis. This part of the salary can be deposited by the employee by depositing the booked ticket with the company. This benefit is available only if you travel twice in four calendar years.

3. House Rent Allowance (HRA)

This part of the salary is given to the employee in lieu of payment of house rent. To get tax exemption on this, it is necessary that it should be part of the salary. You can claim tax exemption on the amount received for HRA with the specified limit.

4. Car Maintenance Allowance

Bank Re-imbursement can be claimed up to a limit on the cost of the car, as per the market. You can also get tax exemption on this. However, it depends on whether the car belongs to the company or the employee. This reimbursement is available for some special office work and many personal work.

5.

Most of the multinational companies give food coupons for food and drink during the work in the food coupon office. You can get tax exemption of up to Rs 50 on a one-time meal. Twice a day for 22 working days in a month can avail tax exemption of up to Rs 26,400 annually.

6. Children Education Allowance

In lieu of payment of fees for the child, companies pay an education allowance of Rs 1,200 annually or Rs 100 per month to the employee. This facility is available for two children only. In addition, one can claim tax exemption on payment of tuition fees under Section 80C of the Income Tax Act.

7. Discount on Hostel Expenses

Companies give hostel expenditure allowance to their employees. Under this, the employee gets an annual allowance of Rs 3,600 or Rs 300 per month on the hostel expenses of the child, which is tax-exempt. This discount is available for maximum 2 children only.

8. Phone Bill Re-imbursement

This includes both telephone and mobile phone bill re-imbursement. Telephone charges including broadband internet connection are covered under this. Some companies provide this facility to their employees, which comes under the purview of tax exemption.

9. Uniform Allowance

The employees get this allowance for the maintenance of their uniform while on duty. You can also get tax exemption on the expenses incurred in the purchase and maintenance of the uniform.

10. Gift Voucher

Companies sometimes give gifts to their employees, on which tax exemption is available. However, the condition in this is that its total value does not exceed Rs 50,000 annually, only then can you get tax exemption.

The post ITR Update: 10 types of tax exemptions are included in your salary, have you claimed in ITR? first appeared on Rightsofemployees.com.

For most employees, House Rent Allowance (HRA) is a common component of their salary structure. Although it is a part of the salary, HRA, unlike basic salary, is not fully taxable. Subject to certain conditions, a part of HRAgets 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 taxable income. This helps the employee save tax. Remember, the HRA received is fully taxable if an employee is living in his own house or if he does not pay any rent.

Who can avail HRA?
The tax benefit is available only to a salaried individual who has the HRA component as part of his salary structure and is staying in a rented accommodation. Self-employed professionals cannot avail the deduction.

Click here to use our HRA Calculator 

How much is exempted?
The exemption for HRA benefit is the minimum of:
i) Actual HRA received

1. ii) 50% of salary if living in metro cities, or 40% for non-metro cities; and
   iii) Excess of rent paid annually over 10% of annual salaryFor calculation purpose, the salary considered is ‘basic salary’. In case ‘Dearness Allowance (DA)’ (if it forms a part of retirementbenefits) and ‘commission received on the basis of sales turnover’ is applicable, they too are added to compute the minimum HRA exemption available.The tax benefit is available to the person only for the period in which the rented house is occupied.Example of HRA calculation
   Let’s say an individual, with a monthly basic salary of Rs 15,000, receives HRA of Rs 7,000 and pays Rs 8,400 rent for an accommodation in a metro city. The tax rate applicable to the individual is 20 percent of his income.

   To avail HRA benefit, the least of the following amount (yearly) is exempted, rest is taxable:
   i) Actual HRA received = Rs 84,000
   ii) 50% of salary (metro city) = Rs 90,000 (50% of Rs 1,80,000)
   iii) Excess of rent paid annually over 10% of annual salary = Rs 82,800 (Rs 1,00,800 – (10% of Rs 1,80,000))

   It shows that of Rs 84,000 actually received as HRA, Rs 82,800 gets tax exemption and only the balance of Rs 1,200 gets added to the employee’s income, on which a tax of Rs 240 ( 20 per cent slab ) gets payable.

   Documents
   HRA exemptions can be availed only on submission of rent receipts or the rent agreement with the house owner.

   It is mandatory for the employee to report the Pan Card of the ‘landlord’ to the employer if the rent paid is more than Rs 1,00,000 annually.

   Special cases
   There could be special scenarios in claiming HRA tax benefit, such as:

   Paying rent to family members
   The rented premises must not be owned by the person claiming the tax exemption. So if you stay with your parents and pay rent to them then you can claim that for tax deductions as HRA. However, you cannot pay rent to your spouse. As, in the view of the relationship, you are supposed to take the accommodation together. Thus, these transactions can invite the scrutiny from the Income -tax Department.
   
   
   
   Even if you are renting the house from your parents, make sure you have documentary evidence as proof that financial transactions regarding your tenancy takes place between you and your parent. So keep a record of banking transactions and rent receipts because your claim can get rejected by the tax department if they are not convinced by the authenticity of the transactions. Recently, there has been an instance in which the HRA claim of a salaried taxpayer was rejected by the Mumbai income tax appellate tribunal because the claim for HRA did not appear genuine to the tax officials.

   Also Read: For tax relief, you need proof of rent paid to kin

   Also Read: 10 things to do so that HRA claim does not get rejected

   2. Own a house, but staying in a different city
   One can avail the simultaneous benefit of deduction available for the home loan against ‘interest paid’ and ‘principal repayment’ and HRA in case your own home is rented out or you work in another city.

   Individuals who don’t get HRA but pay rent
   There may be some employees who might not have HRA component in their salary structure. Also, a non-salaried individual might be paying rent. For them, Section 80 (GG) of the Income-tax Act offers help.

   An individual paying rent for a furnished/unfurnished accommodation can claim the deduction for the rent paid under Section 80 (GG) of the I-T Act, provided he is not paid HRA as a part of his salary by furnishing Form 10B.

   How much
   The least of the following is available for exemption from tax under Section 80GG:
   (i) Rent paid in excess of 10% of total income
   (ii) 25% of the total of the total income*
   (iii) Rs 5,000 per month

   *Under this section, the total income is calculated as gross total income minus long-term capital gains, the short-term capital where Securities Transaction Tax (STT) has been paid and deductions available under Sections 80C to 80U, except Section 80GG.

   Conditions
   While claiming a tax deduction, one must remember that the individual himself or his/her spouse, or minor child, or as a member of the Hindu Undivided Family (HUF) must not own any accommodation. Also, if the individual owns any residential property at any place and earns rent from it then no deduction is allowed.

   One can avail the simultaneous benefit of deduction available for the home loan against ‘interest paid’ and ‘principal repayment’ and HRA in case your own home is rented out or you work in another city. However, the same is not available in case of Section 80GG.

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