Payroll
HRAHouse Rent Allowance
HRA is an allowance paid towards rented accommodation that is partly exempt from income tax under the old regime.
HRA is usually set at 40 percent of basic in non-metro cities and 50 percent in Delhi, Mumbai, Kolkata and Chennai. The exempt portion is the least of actual HRA received, rent paid minus 10 percent of basic, and 40 or 50 percent of basic.
Under the new tax regime the exemption does not apply, so HRA is simply part of taxable salary.
In Indian payroll
Rent receipts and the landlord's PAN (when annual rent exceeds ₹1 lakh) are collected as proof each January. Payroll must apply the exemption only for employees who chose the old regime.
What is HRA?
HRA is an allowance paid towards rented accommodation that is partly exempt from income tax under the old regime.
Why does HRA matter in Indian payroll?
Rent receipts and the landlord's PAN (when annual rent exceeds ₹1 lakh) are collected as proof each January. Payroll must apply the exemption only for employees who chose the old regime.
In Kuzhu
The Payroll module in Kuzhu is where HRA is handled, on the same employee record as everything else.
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