HRA Calculator
Calculate your House Rent Allowance tax exemption under Section 10(13A). Enter basic salary, HRA received, and rent paid to find the exempt and taxable
HRA Calculator
Calculator
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Formula: HRA Exemption = MIN(Actual HRA, 50%/40% of Basic, Rent - 10% of Basic)
Worked example — ₹11,000/mo HRA exempt
Formula
HRA Exemption = MIN(Actual HRA, 50%/40% of Basic, Rent - 10% of Basic)
HRA exemption under Section 10(13A) is the minimum of: (1) Actual HRA received, (2) 50% of basic salary for metro cities (Delhi, Mumbai, Chennai, Kolkata) or 40% for non-metro, (3) Rent paid minus 10% of basic salary.
Worked Examples
Example 1: ₹40K basic, ₹15K rent
Problem:Basic ₹40,000, HRA ₹20,000, Rent ₹15,000, metro
Solution:Min(20,000; 20,000; 15,000-4,000=11,000) = ₹11,000
Result:₹11,000/mo HRA exempt
Frequently Asked Questions
Which cities are metro for HRA?
For HRA calculation, metro cities are Delhi, Mumbai, Chennai, and Kolkata. All other cities get the 40% rate. This classification has not been updated to include Bangalore, Hyderabad, etc.
Can I claim HRA if I own a home?
Yes, you can claim HRA even if you own a home in a different city or have a home loan. You can claim both HRA and home loan interest deduction simultaneously under the old tax regime.
What documents do I need to claim HRA exemption?
You need rent receipts (or rental agreement) and your landlord's PAN if annual rent exceeds 1 lakh. Salary slips showing HRA component and Form 12BB declaration to your employer are also required. Keep rent payment proofs like bank transfers for verification.
Is HRA exemption available under the new tax regime?
No. HRA exemption under Section 10(13A) is not available under the new tax regime introduced in Budget 2020. If you pay significant rent, the old regime with HRA exemption may save more tax than the lower slab rates of the new regime.
What happens if I pay rent to my parents?
You can claim HRA exemption by paying rent to your parents, provided they declare the rental income in their tax return. You cannot claim HRA for rent paid to your spouse. Ensure rent is paid via bank transfer and proper rent receipts are maintained.
How is HRA taxed if I do not pay any rent?
If you do not pay rent, the entire HRA received from your employer is fully taxable. The exemption formula requires actual rent paid to exceed 10% of basic salary for any benefit. Living in your own house or rent-free accommodation means zero HRA exemption.
Can I claim both HRA and home loan deduction?
Yes, under the old tax regime you can claim HRA exemption for rent paid in one city and home loan interest deduction under Section 24(b) for a property in another city. Both can also apply in the same city if you live in a rented house while your owned property is rented out or vacant.
What is the 10% of basic salary rule in HRA?
The HRA exemption formula subtracts 10% of your basic salary from actual rent paid. If your monthly rent is less than or equal to 10% of basic salary, this component becomes zero and effectively no HRA exemption is available from this leg of the calculation.
Why does HRA exemption depend on basic salary rather than gross salary?
Both the percentage leg (50% metro, 40% non-metro) and the 10% deduction from rent are computed on salary as defined for HRA, which means basic pay plus dearness allowance forming part of retirement benefits and commission on a fixed percentage of turnover. Special allowance, bonus and reimbursements are excluded. A pay structure with a small basic and a large special allowance therefore shrinks the exemption even though gross pay is unchanged.
What happens to the exemption if I move city or my rent changes mid-year?
The exemption is not a single annual sum. It is worked out for each period during which the salary, HRA, rent and metro status stay constant, and those period figures are added up. If you spend part of the year in Mumbai and part in Pune, the metro months use the 50% leg and the rest use 40%. HRA Calculator handles one such period at a time, so run it once per period and total the results.
References
Reviewed for accuracy by Sahil, Senior Finance & Tax Editor · Editorial policy
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