HRA can be more than basic salary , please suggest.
Kumar Doab (FIN) 30 April 2012
It is felt that it can be unreasonable but not illegal, believing there is no hard and fast rule.
Kindly confirm if the company has recently changed the salary structure or it is same from DOJ?
If HRA has been increased keeping the gross salary/CTC same basic must have been reduced. Reduction in basic shall reduce the PF component thus impacting I.Tax saving on CPF and future financial security. It shall also affect bonus gratuity.
Other allownaces e.g. medical, conveyance might have been reduced or even withdrawn thus increasing tax liablity.
It can be implied that company is aiming to evade various taxes, statutory dues.
Compensation structure/compensation act indicates HRA as 40-50% of basic salary and it satisfies exemption limits as per I.Tax limits.
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