HRA Exemption Calculator
Salaried employees receiving House Rent Allowance (HRA) can claim a tax exemption on part of it under the old tax regime. This calculator applies the standard least-of-three rule.
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What is the HRA Exemption Calculator?
House Rent Allowance (HRA) is a salary component many employers pay to help cover rent. Part of it can be claimed as tax-exempt income — but only if you're on the old tax regime and actually pay rent; the new tax regime does not allow an HRA exemption at all, regardless of how much rent you pay.
How to Calculate
Enter your Basic salary, the HRA you actually receive, the rent you pay, and whether you live in a metro city (Delhi, Mumbai, Kolkata or Chennai) or elsewhere — the exemption limit is higher for metros. The exempt amount is the smallest of three figures: actual HRA received, rent paid minus 10% of Basic, or 50%/40% of Basic for metro/non-metro; whatever HRA remains beyond that gets added back to your taxable salary.
Formula
Exempt HRA is the least of:
- Actual HRA received
- Rent paid minus 10% of basic salary
- 50% of basic salary (metro cities) or 40% (non-metro)
The remainder of your HRA (received minus exempt) is added back to your taxable salary.
Worked Examples
Example 1 u2014 Metro city
Basic ₹50,000, HRA ₹25,000, rent ₹20,000, metro: exempt = least of (25,000; 15,000; 25,000) = ₹15,000/month (₹1,80,000/year).
Example 2 u2014 Low rent limits the exemption
If rent is only ₹8,000/month, then rent − 10% of basic = 8,000 − 5,000 = ₹3,000 — the smallest of the three, so only ₹3,000/month is exempt despite receiving ₹25,000 HRA.
Definitions
- Basic Salary
- Your monthly basic pay (plus DA if applicable), the base for all three HRA limits.
- HRA Received
- The House Rent Allowance component in your monthly salary.
- Rent Paid
- The actual monthly rent you pay for your accommodation.
- City Type
- Metro cities (Delhi, Mumbai, Kolkata, Chennai) use a 50% of basic limit; all others use 40%.
How to Use
- Enter your monthly basic salary.
- Enter your monthly HRA received.
- Enter your monthly rent paid.
- Select whether you live in a metro city.
- Read your exempt and taxable HRA amounts, shown annually.