House Rent Calculation For Income Tax In India

HRA Exemption Formula:

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

Rent Paid (INR):

INR

Salary (basic + DA in INR):

INR

HRA Received (INR):

INR

City Type:

HRA Exemption (INR):

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1. What is HRA Exemption?

HRA (House Rent Allowance) exemption is a tax benefit available to salaried individuals in India who receive HRA as part of their salary and pay rent for their accommodation. The exemption amount is calculated as per Income Tax rules.

2. How HRA Exemption is Calculated?

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

\[ \text{HRA Exemption} = \min\left(\begin{array}{l} \text{Actual HRA Received}, \\ \text{Rent Paid} - 10\% \text{ of Basic Salary}, \\ 50\% \text{ of Salary (for metro) or } 40\% \text{ (for non-metro)} \end{array}\right) \]

Where:

Actual HRA Received - The amount you actually receive as HRA from your employer
Rent Paid minus 10% of Salary - The excess of rent paid over 10% of your basic salary
50%/40% of Salary - 50% of basic salary if living in metro city (Delhi, Mumbai, Chennai, Kolkata), else 40%

3. Importance of HRA Exemption

Details: Claiming HRA exemption can significantly reduce your taxable income and thus your tax liability. It's one of the most common and valuable tax-saving provisions for salaried individuals in India.

4. Using the Calculator

Tips: Enter your actual rent paid, basic salary + DA, actual HRA received, and select whether you live in a metro city or not. All values must be positive numbers in INR.

5. Frequently Asked Questions (FAQ)

Q1: What documents are needed to claim HRA exemption?
A: You need rent receipts (with landlord PAN if rent exceeds ₹1 lakh/year) and proof of rent payment (bank transfers preferred).

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

Q3: What if I don't receive HRA in my salary?
A: You cannot claim HRA exemption, but may claim deduction under Section 80GG (with different conditions).

Q4: Is there any maximum limit for HRA exemption?
A: No fixed limit - it depends on your salary structure, rent paid, and city of residence.

Q5: Can I claim HRA for two different houses?
A: Generally no - exemption is allowed only for one rented accommodation where you actually reside.