HRA Calculator
Calculate your House Rent Allowance tax exemption as per Section 10(13A) of the Income Tax Act
Tax-free amount
Subject to tax
• 10% of Basic Salary: ₹5,000
• The lowest of the three conditions is exempt from tax
House Rent Allowance (HRA) is a component of salary that provides tax benefits to salaried individuals who live in rented accommodation. Under Section 10(13A) of the Income Tax Act, a portion of HRA is exempt from tax calculation.
HRA Exemption Calculation
The HRA exemption is calculated as the minimum of the following three conditions:
- Actual HRA received - The HRA amount mentioned in your salary slip
- 50% of basic salary (for metro cities) or 40% of basic salary (for non-metro cities)
- Rent paid minus 10% of basic salary - The excess rent you pay over 10% of your basic salary
Metro vs Non-Metro Cities
Metro Cities (50%)
Delhi, Mumbai, Chennai, Kolkata
Non-Metro Cities (40%)
All other cities and towns
💡 Important Note
The remaining HRA amount (HRA Received - HRA Exempt) is added to your taxable income and taxed according to your income tax slab.
Formula
HRA Exempt = Minimum of:
- Actual HRA Received
- 50% of Basic Salary (Metro) OR 40% of Basic Salary (Non-Metro)
- Rent Paid - (10% of Basic Salary)
HRA Taxable = HRA Received - HRA Exempt
Example Calculation
Given:
- Basic Salary: ₹50,000 per month
- HRA Received: ₹20,000 per month
- Rent Paid: ₹25,000 per month
- City: Metro (50% applicable)
Calculation:
- Condition 1: ₹20,000 (Actual HRA)
- Condition 2: ₹25,000 (50% of ₹50,000)
- Condition 3: ₹20,000 (₹25,000 - ₹5,000)
Result:
- HRA Exempt: ₹20,000 (minimum of the three)
- HRA Taxable: ₹0 (₹20,000 - ₹20,000)
Key Points
- Only basic salary is considered, not gross salary
- The calculation is done on a monthly basis
- Metro cities get higher exemption (50% vs 40%)
- If rent is less than 10% of basic salary, no HRA exemption is available
- HRA exemption is available only if you actually pay rent
Q1: Who can claim HRA exemption?
A1: Salaried individuals who live in rented houses and receive HRA as part of their salary can claim HRA exemption. You must be actually paying rent and not living in your own house.
Q2: Can I claim HRA without rent receipts?
A2: Generally, rent receipts are required to claim HRA exemption. If your annual rent exceeds ₹1 lakh, you also need to provide the PAN of your landlord. For rent below ₹1 lakh, receipts are sufficient.
Q3: Is HRA applicable for home loan holders?
A3: Yes, if you're living in a rented home despite owning a house elsewhere, you may still claim HRA exemption. However, you cannot claim HRA for the same property where you're claiming home loan benefits.
Q4: What if I live in a company-provided accommodation?
A4: If you live in company-provided accommodation, you cannot claim HRA exemption. HRA exemption is only available when you pay rent from your own pocket for residential accommodation.
💡 Pro Tip
Keep all rent receipts, rental agreements, and landlord details organized for smooth tax filing. Consider the HRA exemption while planning your salary structure with your employer.