However, HRA is fully taxable if you don’t live in rented accommodation. The house rent allowance or HRA is partially or fully exempt from taxes under Section 10(13A) of the Income Tax Act. House Rent Allowance (HRA): It is the component of the salary offered by the employer to the employees who reside in rented accommodation. The basic salary is a fixed component of the CTC (Cost To Company) package.
The employer pays the employee for his skill, experience, and qualifications. The components of the salary structure are:īasic Salary: The employee’s basic income is around 40%-50% of the total salary. The employment contract specifies the wages, usually made each month. Such regular payment is termed as the salary.
The employer makes regular payments to the employee for the work done.
