What is HRA?

• House Rent Allowance (HRA) is a payment made by the employer to the employee as a part of salary, which allows the employee to claim income tax savings for the rent paid for living in a rented accommodation.
  
  
• As per law, only salaried individuals who stay in rented accommodations are eligible for HRA. Self-employed persons or employees of an organisation having their own houses are not eligible to avail tax benefit under HRA.
  
  

HRA serves as a medium of reducing the taxable income, thus reducing an individual’s tax liability.

• The following main factors affect HRA:
  - Gross salary of the employee
  - Rent paid
  - City of residence
  
  *  Fintra's HRA calculator helps you compute Exempted & Taxable HRA.

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