1. What is HRA Exemption?

The 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 and reflected in your Form 26AS.

2. How Does the Calculator Work?

The calculator uses the HRA exemption formula:

Where:

• Rent Paid — Actual rent paid minus 10% of salary
• 50% or 40% of Salary — 50% for metro cities, 40% for non-metro cities
• 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: Correct calculation of HRA exemption can significantly reduce taxable income. It's verified during tax assessments and must match the amount shown in Form 26AS.

4. Using the Calculator

Tips: Enter actual rent paid, your basic salary + DA, HRA received, and select city type. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Which cities are considered metro?
A: Currently Delhi, Mumbai, Chennai, and Kolkata are classified as metro cities for HRA exemption.

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

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

Q4: Can I claim HRA exemption without rent receipts?
A: No, proper rent receipts are mandatory for claiming HRA exemption.

Q5: How is HRA exemption reflected in Form 26AS?
A: Your employer reports the exempted HRA amount which appears in Part B of Form 26AS under "Income from Salaries".