Dear Gurus,
As required please refer to the below mentioned note:-
1) HRA Exemption:- As per section 10(13A) of the IT Act,1961I)
If any employee is residing in Bombay/Delhi/Calcutta/Madras
For the purpose of getting exemption for HRA, the least of the following will be allowed
a) HRA Actually received
b) Rent paid in excess of 50% of salary (Salary here means basic + DA + commission)
c) 50% of salary (salary here means basic + DA +Commission)
The problem faced in SAP is that it calculates HRA exemption on basic salary instead of taking it on basic + DA + commission as a result employee will get incorrect HRA exemption benefit.
II) If any employee is residing in other cities
The above conditions will remain as it is, but incase of condition c it will be 40% of salary.
As regards Medical allowance:- If any employee is producing medical bills then he/she should get tax benefit on the same. Which is not done in SAP.
Please Advised
Regards
MHPO