Pranoy is entitled to a basic salary of Rs. 5,000 p.m. and dearness allowance of Rs. 1,000 per month, 40% of which forms the part of the retirement benefits. He is also entitled to HRA of Rs. 2,000 p.m. He actually pays Rs. 2,000 p.m. as rent for a house in Delhi. Compute the taxable HRA.

Pranoy is entitled to a basic salary of Rs. 5,000 p.m. and dearness allowance of Rs. 1,000 per month, 40% of which forms the part of the retirement benefits. He is also entitled to HRA of Rs. 2,000 p.m. He actually pays Rs. 2,000 p.m. as rent for a house in Delhi. Compute the taxable HRA.

A. Rs. 17,520

B. Rs. 32,400

C. Rs. 18,000

D. Rs. 24,000

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Answer: A