House rent may vary from month to month. So, choosing month-on-month for HRA declarations allows employees to adjust the HRA exemption according to what they actually pay towards house rent every month. Further, it results in accurate declarations, reduced compliance burden, and improved tax planning.
Choosing annual for HRA declarations is also a good option as it requires less paperwork, reduces errors, and is more convenient. Furthermore, annual declaration allows employees to submit all eligible receipts at once which can maximize their tax savings.
This article will help you learn how to configure the HRA declaration settings on the Keka portal and choose between month-on-month and annual.
Go to Payroll (1) then click on Settings (2) and the Pay Groups (3) window will open up. Choose a pay group (4) if you have multiple groups and then click on configure icon (5) against it.
On the next window, click on Other Settings (1) and then on Miscellaneous Settings (2). Now, find the 3 dots (3) and choose Update Settings.
On the Miscellaneous Settings overlay window, find the HRA Declarations section. Under the question ‘How do you want the HRA to be considered for tax exemption?’, choose any of the 2 options (Month-on-month/Annual) (1). Then, click Save (2).
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