1. What is HRA Exemption?

HRA (House Rent Allowance) exemption is the portion of your HRA that is not taxable under the Indian Income Tax Act. It is calculated as the minimum of three components: actual rent paid minus 10% of salary, 50%/40% of salary (depending on city), or actual HRA received.

2. How Does the Calculator Work?

The calculator uses the HRA exemption formula:

Where:

• Rent Paid — Actual rent paid for accommodation
• Salary — Basic salary + Dearness Allowance (DA)
• 50% of Salary — For metro cities (Delhi, Mumbai, Chennai, Kolkata)
• 40% of Salary — For non-metro cities
• HRA Received — Actual HRA component of salary

Explanation: The exemption is calculated as the least of these three values to ensure fair tax benefits.

3. Importance of HRA Exemption Calculation

Details: Correct HRA exemption calculation helps reduce taxable income and maximize tax savings while ensuring compliance with Indian tax laws for e-filing.

4. Using the Calculator

Tips: Enter all amounts in INR. Rent paid should be actual rent minus any unrealized rent. Salary includes basic + DA. Select appropriate city type (metro/non-metro).

5. Frequently Asked Questions (FAQ)

Q1: What documents are needed to claim HRA exemption?
A: Rent receipts, rent agreement, and landlord PAN (if rent exceeds ₹1 lakh/year) are typically required.

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 pay rent to family members?
A: You can claim exemption, but the family member should show the rent as income in their tax return.

Q4: Is there any minimum rent amount for HRA exemption?
A: No minimum, but exemption is calculated as (rent paid - 10% of salary), so higher rent gives more benefit.

Q5: How does metro vs non-metro affect calculation?
A: Metro cities allow 50% of salary as the second component, while non-metro allows 40%.