Bangalore: Most people speculate ‘salary’ only as the amount provided by their employers but we tend to ignore the fact there are different meanings of the term that are associated with various action. Especially when salary relates to taxation, there are various segments which are taxable and non-taxable as well. Here are few taxable and non taxable segments which comprise your salary:
House Rent Allowance (HRA)
House rent allowance is exempted under section 10 (13A) of the income tax act. Among the following types of HRA received by you, the least amount would be non-taxable:
- HRA received (i.e. whatever if provided by your company)
- House rent paid minus 10 percent of salary (i.e. when your
salary comprises of basic, daily payment and daily allowance)
- HRA is 50 percent of your salary (same salary composition as above and in case your rented house is situated at Delhi, Mumbai, Kolkata or Chennai)
- HRA is 40 percent of your salary (if your rented house is situated at any other place)
This allowance is to meet the expenses incurred when traveling from office to home and home to office, which is tax exempted up to Rs.800 per month. But the savings made from the travel allowance are taxable.
This allowance is paid to meet the expenditure on conveyance for performing duties for an official purpose. This allowance is totally tax exempted.