1. What is HRA Exemption?

The House Rent Allowance (HRA) exemption is a tax benefit provided by the Indian Income Tax Department to salaried individuals who receive HRA as part of their salary and pay rent for their accommodation. The exemption amount is calculated as per Section 10(13A) of the Income Tax Act.

2. How is HRA Exemption Calculated?

The HRA exemption is the least of the following three amounts:

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

3. Components of HRA Calculation

Salary: For HRA calculation, salary includes Basic Salary + Dearness Allowance (DA) if it forms part of retirement benefits.

Metro Cities: The four major metros (Delhi, Mumbai, Chennai, Kolkata) qualify for 50% of salary calculation, all other cities get 40%.

4. Using the Calculator

Instructions: Enter your actual rent paid, salary (Basic + DA), HRA received from employer, and select whether you live in a metro city or not. The calculator will determine your HRA exemption amount.

5. Frequently Asked Questions (FAQ)

Q1: What documents are needed to claim HRA exemption?
A: Rent receipts with landlord's PAN (if rent exceeds ₹1 lakh annually), rent agreement, and proof of payment.

Q2: Can I claim HRA if I live in my own house?
A: No, HRA exemption is only available for rented accommodation.

Q3: What if I don't have rent receipts?
A: Without proper rent receipts, the HRA exemption may be disallowed during tax assessment.

Q4: Can I claim HRA for two different houses?
A: Generally no, unless you can prove genuine need for maintaining two rented residences.

Q5: Is there any maximum limit for HRA exemption?
A: There's no fixed limit - it depends on your salary, HRA received, and actual rent paid as per the calculation.