HRA Exemption Calculator
Calculate exactly how much of your House Rent Allowance (HRA) is tax-exempt under Section 10(13A), based on your salary, rent, and city.
Salary & Rent Details (Monthly)
Metro = Delhi, Mumbai, Kolkata, Chennai. All other cities are Non-Metro for HRA purposes.
Exemption Breakdown
HRA Exemption (Annual)
₹2,04,000
Taxable HRA (Annual)
₹96,000
The Three Limits (Lowest Wins)
| Rule | Annual Amount |
|---|---|
| 1. Actual HRA Received | ₹3,00,000 |
| 2. Rent Paid − 10% of (Basic + DA) | ₹2,04,000 |
| 3. 50% of (Basic + DA) | ₹3,00,000 |
| HRA Exemption (Lowest of the Three) | ₹2,04,000 |
What is this Calculator?
The HRA (House Rent Allowance) Exemption Calculator tells you exactly how much of the HRA your employer pays you is exempt from income tax, and how much is taxable. HRA is one of the most common salary components, but the tax-exempt portion is not simply "whatever you receive" — it's governed by a specific three-way rule under Section 10(13A) of the Income Tax Act.
It is useful for any salaried employee living in rented accommodation who wants to correctly declare HRA exemption to their employer or while filing their ITR — and it only applies if you opt for the Old Tax Regime, since HRA exemption is not available under the New Regime.
How it Works
Under Section 10(13A), the HRA exemption is the lowest of three amounts, calculated on an annual basis:
- 1. Actual HRA received from your employer during the year.
- 2. Rent paid minus 10% of (Basic Salary + DA).
- 3. 50% of (Basic Salary + DA) if you live in a metro city (Delhi, Mumbai, Kolkata, Chennai), or 40% for any other city.
Whichever of these three figures is smallest becomes your tax-exempt HRA. The remainder of the HRA you received is added to your taxable salary income.
Example Calculation
Neha works in Delhi (a metro city for HRA purposes) with a Basic Salary of ₹50,000/month (no separate DA), receives ₹25,000/month as HRA, and pays ₹22,000/month in rent.
- Rule 1 — Actual HRA received (annual) = ₹25,000 × 12 = ₹3,00,000
- Rule 2 — Rent paid − 10% of Basic = (₹22,000 × 12) − (10% × ₹6,00,000) = ₹2,64,000 − ₹60,000 = ₹2,04,000
- Rule 3 — 50% of Basic (metro) = ₹3,00,000
The lowest of the three is Rule 2, so Neha's HRA exemption is ₹2,04,000, and the remaining ₹96,000 of her HRA is added to her taxable income.
Benefits of Using This Tool
- Accurate Tax Filing: Know the exact exempt and taxable HRA amounts before declaring them to your employer's payroll or filling your ITR.
- Old vs New Regime Decision: A large HRA exemption is often the single biggest reason the Old Regime wins — use this alongside the Income Tax Calculator to check.
- Rent Negotiation Insight: See exactly how much of an incremental rent increase would actually translate into additional tax savings.
Practical Tips:
- You must actually pay rent and, if it exceeds ₹1,00,000 a year, provide your landlord's PAN to your employer to claim the exemption.
- If you pay rent to a parent, you can still claim HRA exemption (provided it's genuine and documented with rent receipts and, ideally, a rent agreement), but not if you pay rent to your spouse.
- HRA exemption is only available under the Old Tax Regime — if you've opted for the New Regime, this exemption does not apply to you at all.
Frequently Asked Questions (FAQs)
Can I claim HRA exemption if I own a house in the same city?
It's possible but attracts scrutiny. If you genuinely live in rented accommodation for valid reasons (e.g., your own house is far from your workplace or rented out) you can still claim it, but the Income Tax Department may ask for justification. If you live in your own house, you generally cannot claim HRA exemption for it.
What if I don't receive HRA but still pay rent?
If your employer doesn't pay you HRA, or you're self-employed, you may instead be able to claim a deduction under Section 80GG, subject to conditions and a lower cap — this HRA calculator does not cover Section 80GG.
Is HRA exemption available under the New Tax Regime?
No. HRA exemption under Section 10(13A) is only available if you choose the Old Tax Regime. Under the New Regime, your entire HRA is added to your taxable salary.
Do I need to submit rent receipts every month?
Most employers require quarterly or annual rent receipts, and proof such as a rental agreement, especially for larger claims. If your annual rent exceeds ₹1,00,000, your landlord's PAN is mandatory documentation as well.
Sources & References
- Income Tax Act, 1961 — Section 10(13A) and Rule 2A (HRA Exemption)
- Income Tax Department of India — Salaried Individuals Guidance