Hra Calculator

House Rent Allowance (HRA) is a common component of a salary package in India. Under Section 10(13A) of the Income Tax Act, you can claim a tax exemption on your HRA if you live in a rented house.

However, you don't just get to arbitrarily deduct your entire rent from your taxes. The law sets strict mathematical rules to prevent abuse.

The law states that your tax-exempt HRA is strictly the lowest of the following three calculated amounts:

1. The actual HRA received from your employer.
2. Actual rent paid minus 10% of your Basic Salary (plus DA).
3. 50% of your Basic Salary (if you live in a Metro city: Delhi, Mumbai, Chennai, Kolkata) OR 40% of your Basic Salary (for non-metro cities).

If your actual rent is less than 10% of your basic salary, Condition #2 evaluates to zero or negative, which means your total allowable HRA exemption is exactly ₹0.

Important Note: The HRA exemption is only available if you opt for the Old Tax Regime when filing your returns.

If you file your taxes under the New Tax Regime, you are legally prohibited from claiming an HRA exemption. In that scenario, the entire HRA amount you receive from your employer is fully taxable alongside your basic salary.