What is HRA?

House rent allowance is the allowance that is provided by the company to the employee for the purpose of accommodation. This allowance is applicable only if the employee is living in a rented house. If the employee is living in her own house i.e. without paying the rent then this allowance is fully taxable. This allowance helps the employee with tax benefits towards the payment of accommodation. The amount of the allowance to be paid totally depends upon the employer and various criteria like the salary and city of residence.

According to section 10(13A), the employee can claim an exemption on the house rent to the extent of whichever is least among the following-

  • The actual rent that is paid should be less than 10% of the basic salary.
  • If the employee is staying in a metro city then 50% of the basic salary and 40% if the employee is living in a non-metro city.
  • The actual amount received as the House Rent Allowance from the employer.

Where it can be added in SalaryBox app?

  • Select the employee on which you want to add allowance to

  • Go to Salary Payment Info

  • Click on edit ESI, EPF and Allowance option 
  • Select HRA and add