Income tax rule for HRA exemption

[bobby]

#19208

Hi,
I’m using TDS module of Lenvica HRMS trial version. It seems good as its integrated salary module. My query is, HRA exemption is showing as 0 after the tax computation even though the declarations are done properly. Please help me out.

Bobby

[Rijo Pappachan]

#20022

Hi Bobby,

As per the income tax rule,
1. Total of HRA
2. Rent – 10% of (Basic Pay + DA + Commission)
3. 40% of (Basic Pay + DA + Commission) (50% in case of Metropolitan City)

HRA Exemption = Minimum of the three.

Lenvica HRMS is working based on the above rule. So please check the above points let us know if you have any queries.

Thanks,
Rijo

[bobby]

#20023

I’ve cross checked with the above rule.  As per the rule, 2nd point(Rent – 10% of (Basic Pay + DA + Commission) ) should work and a particular amount should be calculated as exemption. But as I said it’s showing as ‘0’ only.

Thanks
Bobby

[Rijo Pappachan]

#20024

Hi Bobby,

I think, you may not be using the system defined salary heads (Basic Pay, HRA etc) in the salary group. May be you have created your own salary heads like ‘Basic Salary’ for salary processing. Exemptions will not calculate properly, if you are not using these systems defined salary heads.

You need to use system defined salary heads or required to install the latest update as its providing a facility to map the user defined salary heads with system defined salary heads, to resolve this problem. You can download the latest update from the link below.
http://updates.lenvica.in/AttendHRM_TDS_Update_3.6.14.exe

Hope this will help!

Regards,
Rijo

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