HRA Calculator: Calculate House Rent Allowance Exemption Online
Calculate your HRA exemption under Section 10(13A) of the Income Tax Act. Enter your salary, HRA received, and rent paid to find out how much HRA is tax-exempt and how much is taxable.
House Rent Allowance (HRA) is a component of salary provided by employers to employees to meet their rental accommodation expenses. It is one of the most significant tax-saving components of a salaried employee's pay structure.
Under Section 10(13A) of the Income Tax Act, a portion of the HRA received can be claimed as a tax exemption, provided the employee is actually paying rent for their accommodation. The exemption amount is calculated based on a specific formula that considers the employee's basic salary, HRA received, rent paid, and the city of residence.
It is important to note that HRA exemption is available only under the Old Tax Regime. If you opt for the New Tax Regime, you cannot claim HRA exemption. Use our Income Tax Calculator to compare which regime is more beneficial for you.
HRA Exemption Formula
The HRA exemption under Section 10(13A) is the minimum of the following three amounts:
HRA Exemption = Minimum of (A, B, C)
Where:
A = Actual HRA received from the employer during the financial year
B = 50% of (Basic Salary + DA) for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% of (Basic Salary + DA) for non-metro cities
C = Rent paid − 10% of (Basic Salary + DA) — the actual rent paid in excess of 10% of your basic salary plus dearness allowance
Example Calculation
Consider an employee in Mumbai with the following details:
Basic Salary: ₹6,00,000 per annum
Dearness Allowance: ₹0
HRA Received: ₹2,40,000 per annum
Rent Paid: ₹1,80,000 per annum
Calculation:
A = ₹2,40,000 (Actual HRA received)
B = 50% of ₹6,00,000 = ₹3,00,000 (Metro city)
C = ₹1,80,000 − 10% of ₹6,00,000 = ₹1,80,000 − ₹60,000 = ₹1,20,000
HRA Exemption = Minimum of (₹2,40,000, ₹3,00,000, ₹1,20,000) = ₹1,20,000
Taxable HRA = ₹2,40,000 − ₹1,20,000 = ₹1,20,000
How to Use the Y1 Money HRA Calculator
Follow these simple steps to calculate your HRA exemption:
Step 1: Enter your annual Basic Salary
Step 2: Enter your annual Dearness Allowance (DA). Enter 0 if not applicable.
Step 3: Enter the total HRA received from your employer for the year
Step 4: Enter the total rent paid during the year
Step 5: Select whether you live in a Metro or Non-Metro city
The calculator instantly shows all three components of the HRA calculation, the exempted HRA amount, and the taxable HRA that will be added to your income.
Metro vs Non-Metro Cities
The classification of your city significantly impacts your HRA exemption:
Metro Cities (50% of Basic+DA): Delhi, Mumbai, Kolkata, and Chennai are classified as metro cities. Employees living in these cities get a higher HRA exemption — 50% of (Basic Salary + DA).
Non-Metro Cities (40% of Basic+DA): All other cities like Bangalore, Hyderabad, Pune, Ahmedabad, Jaipur, Lucknow, etc. are classified as non-metro cities. The HRA exemption is 40% of (Basic Salary + DA).
Note that cities like Bangalore, Hyderabad, and Pune, despite being major IT hubs with high rental costs, are still classified as non-metro cities for HRA calculation purposes.
Who Can Claim HRA Exemption?
To claim HRA exemption, you must meet all of the following conditions:
Salaried Employee: You must be a salaried individual receiving HRA as part of your salary. Self-employed individuals cannot claim HRA exemption.
Actually Paying Rent: You must be paying rent for your accommodation. If you own the house you live in, you cannot claim HRA.
Old Tax Regime: HRA exemption is available only under the Old Tax Regime. It is not available under the New Tax Regime.
PAN of Landlord: If your annual rent exceeds ₹1,00,000, you must provide the PAN of your landlord. This is mandatory for claiming the exemption.
Interestingly, you can claim both HRA exemption and home loan benefits simultaneously if you live in a rented house in one city and own a house in another city on which you are paying a home loan EMI.
Documents Required for HRA Claim
Keep these documents ready to claim HRA exemption:
Rent Receipts: Monthly or quarterly rent receipts signed by the landlord with revenue stamps (if rent > ₹5,000 per month)
Rent Agreement: A registered or unregistered rent/lease agreement between you and the landlord
Landlord's PAN: Mandatory if annual rent exceeds ₹1,00,000. Without PAN, HRA exemption above this limit may be denied.
Bank Statements: Proof of rent payments through bank transfers can serve as additional evidence
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Frequently Asked Questions
Yes, you can claim HRA exemption by paying rent to your parents, provided it is a genuine arrangement. Your parents must include the rental income in their tax return. You will need proper rent receipts, a rent agreement, and if the annual rent exceeds ₹1,00,000, your parent's PAN card details. However, you cannot pay rent to your spouse and claim HRA.
No, HRA exemption under Section 10(13A) is not available under the New Tax Regime. If you want to claim HRA exemption, you must opt for the Old Tax Regime. However, the New Regime offers lower tax rates that may compensate for the loss of HRA exemption depending on your income level.
If you don't receive HRA as part of your salary but still pay rent, you can claim a deduction under Section 80GG of the Income Tax Act. The deduction is the minimum of: (1) Rent paid minus 10% of total income, (2) ₹5,000 per month, or (3) 25% of total income. This deduction is available under the Old Regime only.
Yes, you can claim both HRA exemption and home loan benefits (Section 24 and Section 80C) if you live in a rented house in one city due to employment and own a house in another city. For example, if you work in Bangalore and rent a flat there while owning a house in your hometown on which you pay EMI, you can claim both benefits.
No, Bangalore (Bengaluru) is not classified as a metro city for HRA calculation purposes. Only Delhi, Mumbai, Kolkata, and Chennai are considered metro cities. Bangalore falls under the non-metro category, which means the HRA component is calculated at 40% of (Basic + DA) instead of 50%.
If you don't submit rent receipts or proof of rent payment to your employer, the employer will not consider HRA exemption while calculating your TDS. You can still claim the exemption while filing your Income Tax Return (ITR), provided you have the necessary documents. However, it is advisable to submit rent receipts to your employer to reduce TDS throughout the year.
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