HRA Tax Exemption Calculator
Calculate your HRA exemption under Section 10(13A) and the income tax it saves, compared with the new regime.
What is the HRA Tax Exemption Calculator?
Salaried employees who receive HRA and pay rent can exempt part of the HRA from tax in the old regime.
How does it work?
The exemption is the least of: HRA received; rent paid minus 10% of basic + DA; and 50% (metro) or 40% (non-metro) of basic + DA. The calculator computes old-regime tax with and without the exemption, and the new-regime tax for comparison.
Formula
Exempt HRA = min(HRA, Rent − 10% × Salary, 50%/40% × Salary)
Example
Basic ₹6 lakh, HRA ₹2.4 lakh and rent ₹2.16 lakh in a metro: limits are ₹2.4 lakh, ₹1.56 lakh and ₹3 lakh, so ₹1.56 lakh is exempt.
The three limits, explained
HRA exemption is the lowest of three amounts, each calculated for the period you actually paid rent:
- The HRA your employer actually paid you.
- Rent paid minus 10% of your salary (basic plus dearness allowance that counts for retirement benefits).
- 50% of salary if you live in Delhi, Mumbai, Kolkata or Chennai, or 40% elsewhere.
Worked examples
Metro: basic ₹6,00,000 a year, HRA ₹3,00,000 and rent ₹3,00,000 (₹25,000 a month) in Mumbai. The limits are ₹3,00,000 (HRA received), ₹2,40,000 (rent minus 10% of basic) and ₹3,00,000 (50% of basic). The exemption is ₹2,40,000 and the remaining ₹60,000 of HRA is taxable.
Non-metro: basic ₹4,80,000, HRA ₹1,92,000 and rent ₹2,16,000 (₹18,000 a month) in Pune. The limits are ₹1,92,000, ₹1,68,000 and ₹1,92,000 (40% of basic). The exemption is ₹1,68,000.
In both cases the rent-based limit decides the answer. Paying higher rent raises the exemption only until it reaches one of the other two limits.
HRA in the new regime
HRA exemption is available only in the old tax regime. In the new regime the full HRA is taxable, though lower slab rates and the larger rebate often make the new regime cheaper anyway. This calculator shows both so you can compare.
If HRA is your main deduction, compare the old-regime tax saving with the break-even deduction figures in our guide to the old and new regimes.
Documents and common situations
- Submit rent receipts to your employer. If annual rent is above ₹1 lakh, the landlord’s PAN is also required.
- Paying rent to parents: allowed if they own the house and actually receive the rent, which they must show as income in their own returns. Rent paid to a spouse is generally not accepted.
- Changing cities during the year: calculate each period separately with the correct metro or non-metro percentage and add them up.
- Not receiving HRA at all: self-employed people and employees without HRA may be able to claim a deduction for rent under Section 80GG in the old regime, subject to lower limits.
- If you forgot to submit proofs to your employer, you can still claim the exemption when filing your return, as long as you keep the evidence.
Frequently asked questions
Can I claim HRA and home loan benefits together?
Yes, if you live in a rented house and the house you own is in another city or you have genuine reasons for not living in it.
What proof is needed?
Rent receipts or a rental agreement, and the landlord’s PAN if annual rent exceeds ₹1 lakh.
Is Bengaluru or Hyderabad a metro for HRA?
No. For HRA, only Delhi, Mumbai, Kolkata and Chennai get the 50% limit. All other cities, including Bengaluru, Hyderabad and Pune, use 40%.
Does HRA exemption depend on my CTC?
No. It depends on basic salary plus eligible DA, the HRA component and the rent you pay. A higher basic raises both the 10% deduction and the 40% or 50% limit.
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