1. What is HRA Exemption?

The House Rent Allowance (HRA) exemption allows salaried individuals to claim tax benefits on rent paid for accommodation. The exemption is calculated as the least of three amounts specified under Section 10(13A) of the Income Tax Act.

2. How Does the Calculator Work?

The calculator uses the HRA exemption formula:

Where:

• Actual HRA — HRA received from employer
• 50% or 40% of Salary — Based on metro (50%) or non-metro (40%) city
• Rent minus 10% of Salary — Excess rent paid over 10% of salary

Explanation: The exemption is always the lowest of these three values to prevent excessive tax benefits.

3. Importance of HRA Calculation

Details: Correct HRA exemption calculation helps maximize tax savings while remaining compliant with income tax regulations. It's particularly valuable for employees living in rented accommodations in expensive cities.

4. Using the Calculator

Tips: Enter actual HRA received, basic salary, rent paid, and select whether you live in a metro city. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

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

Q2: Can I claim HRA if I live with my parents?
A: Yes, if you pay rent to them and have proper rent receipts. The amount must be actually paid and may be subject to scrutiny.

Q3: What documents are needed for HRA claim?
A: Rent receipts, rent agreement (if annual rent exceeds ₹1 lakh), and landlord PAN (if annual rent exceeds ₹1 lakh).

Q4: Is there any limit on HRA exemption?
A: No fixed limit, but the exemption cannot exceed the least of the three calculated values.

Q5: Can I claim HRA if I own a house?
A: Yes, if you're paying rent for another accommodation while owning a home elsewhere, you can claim HRA benefits.