How do you calculate annual rent?

I get HRA from Aug 2007. But i am paying house rent from April. How to calculate HRA exemption.?

I am getting HRA from Aug07. But, I am paying house rent from April07. I want to know how i will calculate the HRA exemption? Shall i igonore the rent paid from April to July or include? Shall i calculate Salary for 8 months (aug-Mar) or 12 months? Which is correct ? Option A: --8 months : Salary Received :8 * Rs. 8700 = 69600 HRA received: 8 * 4350 ==== 34800 Actual rent Paid : 3000 * 8 ==24000 HRA exemption : 24000-6960 (10% salary)= Rs.17040 OR Option B : Option A: --12 months : Salary Received :in 12 Months = 101,700 HRA received: rs.4350 * 8 months ==== 34800 (since i am receiving it from Aug07 till Mar08) Actual rent Paid : rs. 3000 * 12months ==36000 HRA exemption : 36000-10170 (10% salary)= Rs.25,830 Please tell me which calculation is correct? This is crucial since in case of option i need to invest more to save tax. Thanks in advance.
Answer:

option B,

sudipto Choudhury at Yahoo! Answers Visit the source

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