Manish Chauhan lives in Gurgaon and works for an IT Company.

He pays
Rs 8000/month as a rent. The monthly salary structure of Manish Chauhan
is given below.
Basic salary: 30,000
HRA: 12,000
Conveyance: 2,500
Special allowance: 3,000
Let us get the values according to given formula.
1. Actual HRA Received -=12,000/month = Rs 1,44,000/year
2. Actual rent paid less 10% of basic salary= (Rs. 8,000 X 12) Rs.
36,000 = 96000-36000= 60,000
3. 40% of basic salary = Rs. 1,44,000
Comparing above three situations, we find that 60,000 is the minimum of
all. So Manish will get the tax exemption of only for Rs 60,000.