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.