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HRA

HRA, or house rent allowance, is a salary component paid to an employee for meeting the expense incurred for renting a residential property. It is shown on the Payslip of employees.

Employees claim HRA to offset the increasing cost of living and avail of a partial or complete tax exemption.

The calculation of HRA is based on four factors:

  1. The employee’s salary
  2. The HRA component of the salary
  3. The rent paid by the employee
  4. The location (city) of the rented residence
HRA