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How is exempt amount of the HRA is calculated in order to save taxes?

Nine O Six
Updated

To calculate House Rent Allowance (HRA) for exemption, the lower of the following three amounts is considered:

  1. Actual HRA received
  2. 50% (For metro cities)/40% (For others) of Salary*
  3. Rent Paid less 10% of Salary*

* Salary would include Basic Pay + D.A. + Commission (if considered for retirement benefits).

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