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 is calculated as per Income Tax rules for FY 2023-24.

2. How HRA Exemption is Calculated?

The exemption is the least of three amounts:

Where:

• Rent Paid - Actual rent paid minus 10% of salary
• 50%/40% of Salary - 50% for metro cities (Delhi, Mumbai, Chennai, Kolkata), 40% for others
• HRA Received - Actual HRA received from employer

3. Importance of HRA Exemption

Details: Claiming HRA exemption can significantly reduce taxable income. Proper documentation (rent receipts, rental agreement) must be maintained for verification.

4. Using the Calculator

Tips: Enter actual rent paid, salary (Basic + DA), HRA received, and select city type. All values must be positive numbers in INR.

5. Frequently Asked Questions (FAQ)

Q1: Which cities are considered metro for HRA?
A: Only Delhi, Mumbai, Chennai, and Kolkata qualify for 50% calculation. All others use 40%.

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

Q3: Is PAN required for landlord?
A: Only if annual rent exceeds ₹1,00,000. Otherwise, landlord details are sufficient.

Q4: Can I claim HRA if I pay rent to parents?
A: Yes, but the payment must be genuine with proper documentation and banking transactions.

Q5: What if my rent exceeds ₹50,000 per month?
A: TDS of 5% may apply under Section 194IB if total rent exceeds ₹50,000 per month.