diff --git a/addons/l10n_in_hr_payroll/data/l10n_in_hr_payroll_data.xml b/addons/l10n_in_hr_payroll/data/l10n_in_hr_payroll_data.xml
index 780829aec4c..8a3d99c9087 100644
--- a/addons/l10n_in_hr_payroll/data/l10n_in_hr_payroll_data.xml
+++ b/addons/l10n_in_hr_payroll/data/l10n_in_hr_payroll_data.xml
@@ -14,39 +14,20 @@
         </record>
 
         <record id="hr_salary_rule_houserentallowancemetro" model="hr.salary.rule">
-            <field name="code">HRAM</field>
+            <field name="code">HRA</field>
             <field name="amount_select">code</field>
-            <field name="amount_python_compute">result = payslip.company_id.dearness_allowance and ((contract.wage + DA) * 0.50) or (contract.wage * 0.50)</field>
+            <field name="amount_python_compute">result=payslip.company_id.dearness_allowance and ((contract.wage + DA) * 0.50) or (contract.wage * 0.50) if (contract.city_type=='metro') else payslip.company_id.dearness_allowance and ((contract.wage + DA) * 0.40) or (contract.wage * 0.40) if (contract.city_type=='non-metro') else 0.00</field>
             <field name="category_id" ref="hr_payroll.ALW"/>
-            <field name="name">House Rent Allowance for metro city</field>
+            <field name="name">House Rent Allowance</field>
             <field name="sequence" eval="51"/>
-            <field name="condition_select">python</field>
-            <field name="condition_python">result = (contract.city_type=='metro')</field>
             <field name="note">Rent receipts can be shown for taking tax benefit for living in a rented house.
 Income tax exemption for HRA will be least of following:
     1. The actual amount of HRA received as a part of salary.
-    2. 40% (if living in non-metro area).
+    2. 50% (if living in metro area) and 40% (if living in non-metro area) of (basic salary+Dearness allowance(if applicable)).
     3. Rent paid minus 10% of (basic salary+DA).
             </field>
         </record>
 
-        <record id="hr_salary_rule_houserentallowancenonmetro" model="hr.salary.rule">
-            <field name="amount_select">code</field>
-            <field name="amount_python_compute">result = payslip.company_id.dearness_allowance and ((contract.wage + DA) * 0.40) or (contract.wage * 0.40)</field>
-            <field name="code">HRANM</field>
-            <field name="category_id" ref="hr_payroll.ALW"/>
-            <field name="name">House Rent Allowance for non metro city</field>
-            <field name="sequence" eval="52"/>
-            <field name="condition_select">python</field>
-            <field name="condition_python">result = (contract.city_type=='non-metro')</field>
-            <field name="note">Rent receipts can be shown for taking tax benefit for living in a rented house.
-Income tax exemption for HRA will be least of following:
-    1. The actual amount of HRA received as a part of salary.
-    2. 50% (if living in metro area) of (basic salary+Dearness allowance (DA)).
-    3. Rent paid minus 10% of (basic salary+DA).
-             </field>
-         </record>
-
         <record id="hr_salary_trans_allownce" model="hr.salary.rule">
             <field name="code">TCA</field>
             <field name="name">Transport/Conveyance Allownace</field>
diff --git a/addons/l10n_in_hr_payroll/l10n_in_hr_payroll.py b/addons/l10n_in_hr_payroll/l10n_in_hr_payroll.py
index 302611d9c92..9dcf69ef5b7 100644
--- a/addons/l10n_in_hr_payroll/l10n_in_hr_payroll.py
+++ b/addons/l10n_in_hr_payroll/l10n_in_hr_payroll.py
@@ -38,7 +38,7 @@ class hr_contract(osv.osv):
 
     _inherit = 'hr.contract'
     _description = 'HR Contract'
-    
+
     _columns = {
         'tds': fields.float('TDS', digits_compute=dp.get_precision('Payroll'), help="Amount for Tax Deduction at Source"),
         'driver_salay': fields.boolean('Driver Salary', help=" Allowance for company provided driver"),
@@ -49,12 +49,15 @@ class hr_contract(osv.osv):
             ('non-metro', 'Non-Metro'),
             ], 'Type of City', readonly=False),
     }
+    _defaults = {
+        'city_type': 'non-metro',
+    }
 
 hr_contract()
 
 class hr_employee(osv.osv):
     '''
-    Employee's Join date allows to compute total working 
+    Employee's Join date allows to compute total working
     experience of Employee and it is used to calculate Gratuity rule.
     '''
 
@@ -89,12 +92,12 @@ class hr_employee(osv.osv):
             else:
                 res[employee.id] = 0.0
         return res
-    
+
     _columns = {
         'join_date': fields.date('Join Date', help="Joining date of employee"),
         'number_of_year': fields.function(_compute_year, string='No. of Years of Service', type="float", store=True, help="Total years of work experience"),
         }
-    
+
 hr_employee()
 
 class payroll_advice(osv.osv):
@@ -119,7 +122,7 @@ class payroll_advice(osv.osv):
         'company_id':fields.many2one('res.company', 'Company', required=True, readonly=True, states={'draft': [('readonly', False)]}),
         'bank_id':fields.many2one('res.bank', 'Bank', readonly=True, states={'draft': [('readonly', False)]}, help="Select the Bank from which the salary is going to be paid"),
     }
-    
+
     _defaults = {
         'date': lambda * a: time.strftime('%Y-%m-%d'),
         'state': lambda * a: 'draft',
@@ -132,7 +135,7 @@ class payroll_advice(osv.osv):
 
     def compute_advice(self, cr, uid, ids, context=None):
         """
-        Advice - Create Advice lines in Payment Advice and 
+        Advice - Create Advice lines in Payment Advice and
         compute Advice lines.
         @param cr: the current row, from the database cursor,
         @param uid: the current user’s ID for security checks,
@@ -244,7 +247,7 @@ class res_company(osv.osv):
     }
     _defaults = {
         'dearness_allowance': True,
-    }    
+    }
 
 res_company()