Financial Daily from THE HINDU group of publications
Monday, Apr 19, 2004
Columns - For the Asking
Help me compute HRA exemption
It can be calculated on an annualised basis unless one or more of its determinants has undergone a change during the course of the year.
As you know, HRA is exempt to the extent of the least of the following: i) actual HRA; ii) rent paid in excess of 10 per cent of salary; and iii) 50 per cent or 40 per cent of salary according as one is posted in one of the four metros or at other places.
If HRA was increased w.e.f. October 1, then there would be a need to calculate the exemption separately for the two halves of the financial year.
Similarly, if the rent was increased, say, from August 1, there would be a need to calculate exemption separately for the first four months.
Reserve vs surplus
N. Seshadri, e-mail
`Reserves and surplus' is a compound term used in a broad sense to denote the accumulated profits.
While some of them are like revaluation reserve and investment allowance reserve (no longer in vogue) not available for distribution amongst the shareholders, the thread that runs through all of them is that they belong to the shareholders. This is brought home by the use of the word surplus enuring for shareholders.
The amendment to Section 350 of the Companies Act deleting reference to depreciation on the WDV of assets is prospective, that is, it takes effect from December 14, 2000.
There is no way one can confer retrospectivity on make retrospective an amendment that pointedly says it is prospective.
Managerial remuneration cannot be re-jigged on the basis of a propitious amendment that alas has not been conferred with retrospective status.
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