HRA Exemption Calculator
Print| Taxable HRA Amount | $0 / yr |
The HRA Exemption Calculator (House Rent Allowance Calculator) is an essential income tax tool designed for salaried employees renting residential accommodation in India. Under Section 10(13A) of the Income Tax Act (Old Tax Regime), employees receiving HRA as part of their salary structure can deduct a significant portion of rent paid from taxable income.
Whether living in a metro city (Delhi, Mumbai, Kolkata, Chennai) or a non-metro location, this calculator computes the exact tax-exempt HRA amount and taxable remainder automatically.
The HRA Exemption Formula (Section 10(13A))
According to Income Tax Rule 2A, tax-exempt HRA is equal to the MINIMUM of the following three mathematical calculations:
Exempt HRA = MIN ( Condition 1, Condition 2, Condition 3 )
- Condition 1: Actual House Rent Allowance (HRA) received from employer.
- Condition 2: Actual Rent Paid minus 10% of Salary (
Rent Paid - 0.10 * Basic Salary). - Condition 3: 50% of Basic Salary for Metro cities (Delhi, Mumbai, Kolkata, Chennai) OR 40% of Basic Salary for Non-Metro cities.
Where Salary for HRA purposes equals Basic Salary + Dearness Allowance (DA).
Taxable HRA = Actual HRA Received - Exempt HRA
HRA Exemption Benchmark Table
The table below presents tax-exempt vs. taxable HRA breakdowns across different salary and rent scenarios (assuming Basic Salary = ₹50,000 / month, Actual HRA = ₹25,000 / month):
| City Classification | Monthly Rent Paid (₹) | Monthly Exempt HRA (₹) | Monthly Taxable HRA (₹) | Annual Taxable HRA (₹) |
|---|---|---|---|---|
| Metro (Mumbai / Delhi) | ₹20,000 | ₹15,000 | ₹10,000 | ₹120,000 |
| Metro (Mumbai / Delhi) | ₹30,000 | ₹25,000 | ₹0 (100% Exempt) | ₹0 |
| Non-Metro (Pune / Bangalore) | ₹20,000 | ₹15,000 | ₹10,000 | ₹120,000 |
| Non-Metro (Pune / Bangalore) | ₹30,000 | ₹20,000 (40% Cap) | ₹5,000 | ₹60,000 |
Step-by-Step HRA Exemption Calculation Example
An employee living in Delhi (Metro City) has a monthly Basic Salary of ₹60,000, receives ₹24,000 per month HRA, and pays ₹22,000 per month rent to their landlord.
Step 1: Calculate the 3 Exemption Criteria
- Condition 1 (Actual HRA Received): ₹24,000 / month
- Condition 2 (Rent Paid – 10% of Basic): ₹22,000 – (0.10 * ₹60,000) = ₹22,000 – ₹6,000 = ₹16,000 / month
- Condition 3 (50% of Basic for Metro): 0.50 * ₹60,000 = ₹30,000 / month
Step 2: Find Minimum of the 3 Criteria
MIN ( ₹24,000 , ₹16,000 , ₹30,000 ) = ₹16,000 / month
Annual Exempt HRA = ₹16,000 * 12 = ₹192,000
Step 3: Calculate Taxable HRA
Taxable HRA = Actual HRA - Exempt HRA = ₹24,000 - ₹16,000 = ₹8,000 / month
Annual Taxable HRA = ₹8,000 * 12 = ₹96,000
Result: Out of ₹288,000 annual HRA received, ₹192,000 is tax-free, and ₹96,000 is added to taxable income.
Frequently Asked Questions
Is HRA exemption available under the New Tax Regime?
No. HRA tax exemption under Section 10(13A) is available only under the Old Tax Regime. Under the New Tax Regime (Section 115BAC), HRA exemption cannot be claimed.
Can I pay rent to my parents and claim HRA exemption?
Yes. You can pay rent to your parents and claim HRA tax exemption, provided your parents own the property, you pay rent via banking channels (UPI/cheque), and your parents declare the rent income in their Income Tax Returns (ITR).
When is Landlord PAN mandatory for claiming HRA?
If your total annual rent paid exceeds ₹1,000,000 (₹1 Lakh) per year, it is mandatory to provide your landlord’s Permanent Account Number (PAN) to your employer.
Which cities qualify for the 50% Metro HRA limit?
For Income Tax HRA calculations, only four cities qualify for the 50% limit: Delhi, Mumbai, Kolkata, and Chennai. All other cities (including Bengaluru, Hyderabad, and Pune) are categorized under the 40% non-metro limit.