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HRA Calculator - Calculate House Rent Allowance Tax Exemption

Calculate your HRA tax exemption accurately based on your salary, rent paid, and city type. Get detailed breakdown under Section 10(13A) of Income Tax Act with comprehensive tax savings analysis.

Why Our HRA Calculator is India's Most Trusted Choice

📊 Most Accurate HRA Calculations: Uses exact Section 10(13A) formulas with real-time metro/non-metro city classifications and latest Income Tax Act provisions
🏙️ Complete Metro City Coverage: Updated with current metro city classifications including Delhi, Mumbai, Chennai, and Kolkata for precise 50% vs 40% calculations
💰 Advanced Tax Savings Analysis: Calculate actual tax savings based on your income slab with detailed exempt vs taxable HRA breakdown
📈 Interactive Visual Charts: Dynamic charts showing HRA exemption methods, tax comparisons, and year-wise projections for better planning
⚖️ Old vs New Tax Regime Guidance: Clear information about HRA availability under different tax regimes with switching recommendations
📱 Mobile-First Design: Optimized for all devices with smooth sliders, instant calculations, and responsive design for on-the-go usage

HRA Calculation Details

₹15K ₹1.5L
Your monthly basic salary component
₹0 ₹50K
Enter 0 if no DA is provided
₹0 ₹75K
Monthly HRA component from your employer
₹0 ₹1L
Actual monthly rent you pay for accommodation
Metro cities get 50% exemption, non-metro get 40%
Used to calculate tax savings from HRA exemption

Your HRA Tax Exemption

Annual HRA Tax Exemption
₹2,04,000
₹17,000 per month
Annual HRA Received
₹3,00,000
HRA Exempt from Tax
₹2,04,000
HRA Taxable
₹96,000
Estimated Tax Savings
₹40,800

Detailed HRA Calculation Breakdown

HRA Calculation Components

Component Amount (Annual)
Basic Salary + DA ₹6,60,000
HRA Received ₹3,00,000
Rent Paid ₹2,40,000
City Type Metro (50%)

HRA Exemption Calculation

Calculation Method Amount
Actual HRA Received ₹3,00,000
50%/40% of (Basic + DA) ₹3,30,000
Rent - 10% of (Basic + DA) ₹1,74,000
Exempt HRA (Minimum) ₹2,04,000
Taxable HRA ₹96,000

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HRA Tax Saving Tips

  • Submit rent receipts promptly to your employer for tax exemption
  • Ensure landlord's PAN if annual rent exceeds ₹1 lakh
  • HRA exemption only available under old tax regime - choose wisely
  • You can claim HRA even if paying rent to parents with proper documentation
  • Keep proper rental agreements and digital payment proofs
  • Consider both HRA and home loan benefits if you own property elsewhere

Understanding HRA Tax Exemption Under Section 10(13A)

House Rent Allowance (HRA) is a salary component provided by employers to help employees cover accommodation expenses. Under Section 10(13A) of the Income Tax Act, employees can claim partial or full tax exemption on HRA received, but specific conditions and calculation methods apply to determine the exempt amount.

HRA Exemption Calculation Formula

The HRA exemption is calculated as the minimum of three specific components, ensuring that employees get the maximum possible tax benefit while preventing misuse of the provision.

HRA Exemption = Minimum of the following three:
1. Actual HRA received from employer
2. 50% of (Basic + DA) for Metro Cities / 40% for Non-Metro Cities
3. (Actual Rent Paid - 10% of (Basic + DA))

Metro vs Non-Metro Cities Classification for HRA

The Income Tax Department recognizes only Delhi, Mumbai, Chennai, and Kolkata as metro cities for HRA exemption purposes. This classification significantly impacts the exemption amount, with metro cities allowing higher exemption rates.

City Type HRA Exemption Rate Major Cities Included
Metro Cities 50% of (Basic + DA) Delhi, Mumbai, Chennai, Kolkata
Non-Metro Cities 40% of (Basic + DA) Bangalore, Pune, Hyderabad, Ahmedabad, Gurgaon

Essential Requirements for HRA Tax Exemption

  • Salaried Employee Status: HRA exemption is exclusively available for salaried employees receiving HRA as part of their salary structure
  • Rented Accommodation: Employee must live in rented accommodation to claim HRA exemption - own house residents cannot claim this benefit
  • PAN Card Requirement: Landlord's PAN is mandatory if annual rent exceeds ₹1 lakh, ensuring proper tax compliance
  • Old Tax Regime Limitation: HRA exemption is not available under the new tax regime introduced in Budget 2020
  • Proper Documentation: Maintain rent receipts, rental agreements, bank statements, and payment proofs for verification

Special Scenarios and Advanced HRA Rules

  • Paying Rent to Parents: Employees can claim HRA exemption when paying rent to parents, provided parents own the property and declare rental income in their tax returns
  • Multiple Properties: Employees can claim both HRA exemption and home loan tax benefits if they own a house but live in rented accommodation for work
  • Section 80GG Alternative: Employees not receiving HRA can claim rent deduction up to ₹5,000 per month under Section 80GG
  • Partial Year Employment: HRA exemption can be claimed proportionately for partial employment periods during a financial year

Tax Regime Comparison for HRA Benefits

The choice between old and new tax regimes significantly impacts HRA benefits. Under the new tax regime, HRA exemption is not available, but lower tax rates may compensate for some taxpayers depending on their overall deductions and income level.

Common Mistakes to Avoid in HRA Claims

  • Inflated Rent Receipts: Submitting fake or inflated rent receipts can lead to penalties and legal issues
  • Missing Landlord PAN: Not providing landlord's PAN when annual rent exceeds ₹1 lakh invalidates the exemption claim
  • Cash Payments Only: Relying solely on cash payments without proper documentation weakens the exemption claim
  • Ignoring City Classification: Applying wrong metro/non-metro classification can result in incorrect exemption calculations

Frequently Asked Questions about HRA Calculator

HRA exemption is calculated as the minimum of three amounts: actual HRA received, 50% of basic salary for metro cities (40% for non-metro), and rent paid minus 10% of basic salary. Our calculator automatically computes this using the exact Income Tax Act formula to give you the most accurate results.

Only Delhi, Mumbai, Chennai, and Kolkata are classified as metro cities for HRA exemption purposes. Cities like Bangalore, Pune, Hyderabad, and Gurgaon are considered non-metro despite their size. Metro cities allow 50% exemption while non-metro cities allow 40% of basic salary plus dearness allowance.

Yes, you can claim HRA exemption when paying rent to parents, provided they own the property and declare the rental income in their income tax returns. Maintain proper rent receipts, rental agreement, and ensure payments are made through bank transfers for better documentation and tax compliance.

No, HRA exemption is not available under the new tax regime introduced in Budget 2020. You can only claim HRA exemption if you opt for the old tax regime. Compare both regimes to determine which option provides better overall tax savings based on your income and available deductions.

Essential documents include rent receipts with revenue stamps, rental agreement, bank statements showing rent payments, and landlord's PAN card if annual rent exceeds ₹1 lakh. Also maintain address proof of rented property and ensure rent receipts are properly signed and dated by the landlord.

Yes, you can claim both HRA exemption and home loan tax benefits simultaneously if you own a house in one city but live in rented accommodation in another city for work purposes. This is particularly common for employees posted in different cities from where they own property.

There is no specific maximum limit for HRA exemption. The exemption depends on your salary structure, rent paid, and city type. However, it cannot exceed the actual HRA received from your employer. The exemption is calculated using the three-method formula and the minimum amount qualifies for tax exemption.

Submit HRA documents to your employer at the beginning of the financial year or within the specified deadline (usually by January for tax declaration). Some employers allow quarterly submissions. Timely submission ensures proper TDS deduction and avoids last-minute tax payment burden during ITR filing.

Disclaimer: This HRA calculator is for informational purposes only and does not constitute financial or tax advice. Actual HRA exemptions may vary based on specific employment terms, company policies, and applicable tax laws. Please consult your HR department or tax advisor for precise calculations and compliance requirements.

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