HRA Calculator
Use this free HRA calculator to calculate your House Rent Allowance (HRA) exemption under the Income Tax Act.
Enter your salary, HRA received, and rent paid to instantly find the tax-exempt and taxable HRA amount.
HRA Calculator
HRA Calculation
| Actual HRA Received | |
| Rent Paid − 10% of Salary | |
| 50% / 40% of Salary | |
| HRA Exemption | |
| Taxable HRA |
What is HRA?
House Rent Allowance (HRA) is a component of salary paid by an employer to an employee to cover rental housing expenses.
Employees who live in rented accommodation can claim tax exemption on HRA under Section 10(13A) of the Income Tax Act.
However, the exemption is not equal to the entire HRA received. The exemption is calculated based on specific rules prescribed under tax laws.
HRA Exemption Formula
HRA exemption is the minimum of the following three amounts:
- Actual HRA received from employer
- Rent paid minus 10% of salary
- 50% of salary (if living in metro city)
OR
40% of salary (if living in non-metro city)
Salary for HRA calculation includes:
- Basic Salary
- Dearness Allowance (if it forms part of retirement benefits)
Metro Cities for HRA
The following cities are treated as metro cities for HRA purposes:
- Mumbai
- Delhi
- Kolkata
- Chennai
If you live in any other city, it will be treated as non-metro.
Example of HRA Calculation
Let us understand with an example.
| Particulars | Amount |
|---|---|
| Basic Salary | ₹6,00,000 |
| HRA Received | ₹2,00,000 |
| Rent Paid | ₹2,40,000 |
| City | Mumbai |
Step 1 – Actual HRA Received
₹2,00,000
Step 2 – Rent Paid – 10% of Salary
Rent Paid = ₹2,40,000
10% of Salary = ₹60,000
Result = ₹1,80,000
Step 3 – 50% of Salary (Metro)
50% × ₹6,00,000 = ₹3,00,000
Step 4 – HRA Exemption
Minimum of:
- ₹2,00,000
- ₹1,80,000
- ₹3,00,000
Exempt HRA = ₹1,80,000
Step 5 – Taxable HRA
Taxable HRA =
₹2,00,000 – ₹1,80,000 = ₹20,000
Important Points
Who Can Claim HRA Exemption?
You can claim HRA exemption if:
- You receive HRA as part of your salary
- You live in a rented house
- You pay rent to the landlord
When HRA Exemption is Not Allowed
HRA exemption cannot be claimed if:
- You live in your own house
- You do not pay rent
- You receive HRA but stay with parents without paying rent
However, rent paid to parents is allowed if genuine rent payment exists.
Documents Required to Claim HRA
Employees may need the following documents:
- Rent receipts
- Rental agreement
- Landlord PAN (if rent exceeds ₹1 lakh per year)
These documents may be required by the employer during income tax declaration.
HRA vs Home Loan Deduction
Many taxpayers confuse HRA exemption and home loan deduction.
| HRA | Home Loan |
|---|---|
| Applicable if living in rented house | Applicable if owning house |
| Section 10(13A) | Section 24 & 80C |
| Based on rent paid | Based on interest/principal |
In some cases, both deductions can be claimed simultaneously.
Frequently Asked Questions
Can I claim HRA if I live with my parents?
Yes. You can claim HRA if you pay rent to your parents and maintain proper documentation.
Is HRA exemption available under the new tax regime?
No. HRA exemption is not available under the new tax regime.
Is rent receipt mandatory?
Yes, employers generally require rent receipts to allow HRA exemption.
What if rent exceeds ₹50,000 per month?
You may need to deduct TDS under Section 194IB before paying rent to the landlord.
Conclusion
HRA is one of the most important tax-saving components of salary for salaried individuals living in rented houses.
Use the HRA calculator above to quickly determine:
- HRA exemption
- Taxable HRA
- Impact on your income tax liability.