HRA Exemption Calculator

About the HRA Exemption Calculator

House Rent Allowance (HRA) is a common component of a salaried person's pay meant to cover rented accommodation. If you live in a rented home and receive HRA, part of it is exempt from income tax under Section 10(13A) of the old tax regime, which can significantly reduce your tax bill. The exemption is not the full HRA you receive but the lowest of three specific amounts defined by the tax rules.

The exempt HRA is the least of: the actual HRA received; 50% of basic salary for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metros; and the rent you actually pay minus 10% of your basic salary. This calculator works out all three and picks the smallest as your exemption, showing the balance as taxable. Because the rent-minus-10% component matters, higher rent generally means a larger exemption, up to the other limits.

To claim HRA exemption you must actually pay rent and keep proof such as rent receipts and a rental agreement; if annual rent exceeds a threshold, you also need the landlord's PAN. HRA exemption is available only under the old regime, so factor it in when comparing regimes. Even if HRA is not part of your salary, you may claim a deduction for rent paid under Section 80GG, subject to separate conditions and limits.

How to use it

• Exempt HRA is the least of actual HRA, 50%/40% of basic, and rent minus 10% of basic.
• Metro cities allow 50% of basic salary, while non-metros allow 40% in the calculation.
• Keep rent receipts and the rental agreement, plus the landlord's PAN for high annual rent.
• HRA exemption applies only under the old regime, so weigh it when comparing regimes.