1. What is HRA Exemption?

The HRA (House Rent Allowance) exemption is a tax benefit available to salaried individuals who receive HRA as part of their salary and pay rent for their accommodation. The exemption is calculated as the least of three specified amounts.

2. How Does the Calculator Work?

The calculator uses the HRA exemption formula:

Where:

• Rent Paid — Actual rent paid minus 10% of salary
• 50%/40% of Salary — 50% for metro cities, 40% for non-metro cities
• HRA Received — Actual HRA received from employer

Explanation: The exemption is calculated as the minimum of these three values to ensure fair taxation.

3. Importance of HRA Exemption

Details: Proper calculation of HRA exemption can significantly reduce taxable income, leading to lower tax liability. It's especially beneficial for individuals living in high-rent areas.

4. Using the Calculator

Tips: Enter all amounts in Indian Rupees (₹). Provide accurate rent paid, salary (basic + DA), HRA received, and select whether you live in a metro or non-metro city.

5. Frequently Asked Questions (FAQ)

Q1: Which cities are considered metro for HRA?
A: Delhi, Mumbai, Kolkata, and Chennai are considered metro cities. All others are non-metro.

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 my rent exceeds ₹1 lakh annually?
A: You may need to provide landlord's PAN if rent exceeds ₹1 lakh per year.

Q4: Can I claim HRA exemption without receipts?
A: While possible for smaller amounts, proper rent receipts are recommended as proof.

Q5: Is HRA exemption available for self-employed?
A: No, HRA exemption is only for salaried individuals receiving HRA as part of salary.