How to calculate House Rent Allowance (HRA) and exemption thereon?

From the House Rent Allowance (HRA) received as part of salary during the year, least of the following three amounts is exempted from tax (or not included in income): • HRA allowance actually received • Rent paid –10% salary (Basic + DA forming part of salary + commission as a % of turnover) • 40% of salary (50% for Metro city) • Transport allowance / Conveyance Allowance Transport allowance for traveling from residence to work place up to Rs 800 per month is exempted • Children Education Allowance Children Education Allowance is exempted up to Rs. 100/- per month per child for two children. More.

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