HRA? Please help

Can anyone explain how this HRA works?
I have submitted my rent receipts in my company Finance Dep., but looks like its nothing to save until we do something with our HRA. Something like declaring it and like that.

Can anybody explain me with example?

Thanks in Advance!
VS

Quote:

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Originally Posted by vishalsoni

Can anyone explain how this HRA works?
I have submitted my rent receipts in my company Finance Dep., but looks like its nothing to save until we do something with our HRA. Something like declaring it and like that.

Can anybody explain me with example?

Thanks in Advance!
VS

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Vishal,

Please read the FAQ on Salary, it is also covering HRA part with example.

Now as per income tax Act the HRA Exemption Available is least of the following -
1. HRA received
2. 40% of Basic + DA
3. Rent paid in excess of 10% of basic + DA.

So exemption for HRA is depends on HRA recieved, rent paid and basic+DA.