Even after increasing the tax limit, if your income is coming in the tax category, then you can save tax by making multiple claims under the old tax system. You can also save tax by claiming house rent allowance under the old tax regime.

It is important to understand how much tax salaried individuals can save on House Rent Allowance (HRA) and the rules for claiming it.

What is HRA

House Rent Allowance (HRA) is an allowance given by a company to an employee in lieu of payment of house rent expenses. HRA is included in the salary component that the company gives to the employee. An employee drawing salary under regulation number 2A of the Income Tax Act is eligible for HRA exemption under section 10(13A) of the Income Tax Act. This exemption is not given under the new tax regime.

Calculating Tax Exemption on HRA

50% of Basic Pay + DA for metro cities
40% of Basic Pay + DA for non-metro cities
Actual rent paid is less than 10% of Basic Pay + DA

What are the benefits of HRA

Those people who do not live in their own house and live in a rented house are benefited through HRA. For HRA i.e. House Rent Allowance, people have to give information to their employer after which they can claim HRA.

The post HRA Tax Calculation Rules! These are the tax exemption rules for claiming HRA, if you do not know then know first appeared on Rightsofemployees.com.