In order to calculate HRA, salary of the employee refers to the sum of basic salary, dearness allowance and any other commissions. The lowest among the following amounts is considered for the purpose of calculating HRA:
Actual rent paid less 10% of the basic salary.
If the employee resides in a metro city, HRA is 50% of salary. In case of non-metro cities, HRA is 40% of salary.
The actual amount received as HRA from the employer.