HRA Calculator
Find your House Rent Allowance exemption. The calculator shows which of the three rules applies to maximize your tax benefit.
HRA Exemption (Yearly)
₹1.2 L
Taxable HRA (Yearly)
₹1.8 L
Monthly Exemption
₹10,000
Exemption Rules (Annual)
Exemption = Minimum of the three rules above
HRA Calculator – House Rent Allowance Exemption
What is HRA?
House Rent Allowance (HRA) is a component of your salary that helps cover rental expenses. Under Section 10(13A) of the Income Tax Act, you can claim exemption on HRA received, reducing your taxable income. This is one of the most commonly claimed tax benefits for salaried employees living in rented accommodation.
HRA exemption is available only if you actually pay rent and receive HRA as part of your salary. If you live in your own house or don't pay rent, you cannot claim this exemption.
How is HRA Exemption Calculated?
HRA exemption is the minimum of three amounts: (1) Actual HRA received from employer, (2) 50% of basic salary (for metro cities) or 40% of basic salary (for non-metro cities), (3) Rent paid minus 10% of basic salary. The lowest of these three is your exempt HRA; the rest is taxable.
For example, if your basic salary is ₹50,000, HRA received is ₹20,000, rent paid is ₹18,000, and you live in a metro city: Minimum of ₹20,000 (actual HRA), ₹25,000 (50% of basic), and ₹13,000 (rent − 10% of basic) = ₹13,000 exempt. The remaining ₹7,000 HRA is taxable.
Metro vs Non-Metro Cities
For HRA calculation, metro cities are Delhi, Mumbai, Kolkata, and Chennai — where the exemption limit is 50% of basic salary. All other cities (Bengaluru, Hyderabad, Pune, etc.) are non-metro with a 40% limit. This distinction can significantly impact your tax savings.
If you're considering relocating, factor in the HRA impact. Moving from Mumbai (50%) to Pune (40%) reduces your HRA exemption ceiling even if rent and salary remain the same.
HRA Tips for Maximum Tax Savings
Pay rent through bank transfer or UPI for documentation. Ensure your rent exceeds 10% of basic salary (otherwise no exemption). If HRA is low relative to rent, consider both HRA exemption and Section 80GG (rent deduction up to ₹5,000/month for non-HRA earners). Submit rent receipts and rental agreement to your employer for TDS adjustment.
Frequently Asked Questions
Yes, if you actually pay rent to your parents. You'll need a rental agreement and rent receipts. Your parents must declare this rental income in their tax return. This is a legitimate tax planning strategy, but the arrangement must be genuine.
Yes. If you live in a rented house in one city and own a house in another city with a home loan, you can claim both HRA exemption and home loan deductions (Section 80C for principal + Section 24(b) for interest).
Rent receipts (monthly or quarterly), rental agreement, and PAN of landlord (if rent exceeds ₹1,00,000/year). For employer TDS adjustment, submit these at the beginning of the financial year. For ITR filing, keep them for potential assessment.
If both spouses pay rent (either jointly or separately), both can claim HRA exemption individually based on their respective HRA components and rent paid. If only one pays rent, only that person can claim. The key is that the person claiming must actually pay rent and receive HRA in their salary.
Yes, if you actually live in the rented accommodation in the other city. This is common for people working in one city and maintaining family in another. You must have genuine rental arrangements and proof. The city type (metro/non-metro) is determined by where the rented house is located.
Section 80GG is for people who don't receive HRA but pay rent. It allows deduction of the least of: ₹5,000/month, 25% of total income, or rent paid minus 10% of total income. This is useful for self-employed individuals or employees whose salary doesn't include HRA. You must not own any house in the same city.
There's no fixed monetary limit — HRA exemption depends on your actual HRA received, basic salary, and rent paid. The maximum exemption is the minimum of: actual HRA, 50%/40% of basic salary, or rent minus 10% of basic. High earners with high HRA and rent can claim exemptions of ₹3–5 lakh per year.
Generally no — if you own a house in the same city where you work, you're expected to live in it. However, if your owned house is far from your workplace or not habitable, and you genuinely rent closer accommodation, you may claim HRA. The IT department may scrutinize such claims, so ensure genuine reasons.
No. The new tax regime does not allow HRA exemption or most other deductions. If you choose the new regime, your entire HRA is taxable. This is a major reason why people with significant HRA and rent payments often benefit more from the old regime. Use our income tax calculator to compare both regimes.