Hra Exemption Calculator

HRA Exemption Formula:

\[ \text{HRA Exemption} = \min(\text{Rent Paid} - 10\% \text{ of Salary}, \text{50\% of Salary (metro) or 40\% (non-metro)}, \text{HRA Received}) \]

Rent Paid:

INR

Salary (Basic + DA):

INR

HRA Received:

INR

City Type:

HRA Exemption:

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1. What is HRA Exemption?

HRA (House Rent Allowance) exemption is a tax benefit in India that allows salaried individuals to claim exemption on the HRA component of their salary if they pay rent for their accommodation. The exemption is calculated as the minimum of three specified components.

2. How Does the Calculator Work?

The calculator uses the HRA exemption formula:

\[ \text{HRA Exemption} = \min(\text{Rent Paid} - 10\% \text{ of Salary}, \text{50\% of Salary (metro) or 40\% (non-metro)}, \text{HRA Received}) \]

Where:

Rent Paid — Actual rent paid minus 10% of salary
50%/40% of Salary — 50% for metro cities (Delhi, Mumbai, Chennai, Kolkata), 40% for others
HRA Received — Actual HRA received from employer

Explanation: The exemption is the least of these three values, ensuring the benefit doesn't exceed actual HRA received or statutory limits.

3. Importance of HRA Exemption

Details: Proper calculation of HRA exemption can significantly reduce taxable income, leading to lower tax liability. It's especially valuable for employees living in rented accommodations in high-rent cities.

4. Using the Calculator

Tips: Enter all amounts in INR. Provide accurate rent paid (including any additional rent paid to landlord). Salary refers to Basic + DA components. Select correct city type (metro/non-metro).

5. Frequently Asked Questions (FAQ)

Q1: What are metro cities for HRA exemption?
A: Delhi, Mumbai, Chennai, and Kolkata are considered metro cities with 50% limit. All others are non-metro with 40% limit.

Q2: Can I claim HRA exemption if I live with my parents?
A: Yes, if you pay rent to them and can provide rent receipts. The payment should be through proper banking channels.

Q3: What documents are needed to claim HRA exemption?
A: Rent receipts, rent agreement (if annual rent exceeds ₹1 lakh), and landlord PAN (if annual rent exceeds ₹1 lakh).

Q4: Can I claim HRA if I own a house?
A: Yes, if you live in a rented accommodation in a different city from where you own property, you can claim HRA benefit.

Q5: What if my actual rent is higher than HRA received?
A: You can only claim exemption up to the HRA received amount, even if other components are higher.