House Rent Tax Exemption Calculator

HRA Exemption Formula:

\[ Exemption = \min(\text{Actual HRA}, 50\% \text{Salary (Metro)} \text{ or } 40\% \text{(Non-Metro)}, \text{Rent} - 10\% \text{Salary}) \]

Actual HRA Received:

₹

Basic Salary:

₹

Monthly Rent Paid:

₹

City Type:

Tax Exemption Amount:

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1. What is HRA Tax Exemption?

The House Rent Allowance (HRA) tax exemption allows salaried individuals to claim tax benefits on the rent they pay for their accommodation. The exemption is calculated as the minimum of three components: actual HRA received, a percentage of salary, or rent paid minus 10% of salary.

2. How Does the Calculator Work?

The calculator uses the HRA exemption formula:

\[ Exemption = \min(\text{Actual HRA}, 50\% \text{Salary (Metro)} \text{ or } 40\% \text{(Non-Metro)}, \text{Rent} - 10\% \text{Salary}) \]

Where:

Actual HRA — The amount received as HRA from your employer
50% or 40% of Salary — 50% for metro cities (Delhi, Mumbai, Chennai, Kolkata), 40% for others
Rent minus 10% of Salary — The rent you pay minus 10% of your basic salary

Explanation: The exemption is calculated as the lowest of these three values to ensure fair taxation.

3. Importance of HRA Exemption

Details: Proper calculation of HRA exemption can significantly reduce your taxable income, leading to lower tax liability. It's especially beneficial for employees living in rented accommodations in expensive cities.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Which cities are considered metro for HRA calculation?
A: Only Delhi, Mumbai, Chennai, and Kolkata are considered metro cities for HRA exemption purposes.

Q2: Can I claim HRA exemption if I live in my own house?
A: No, HRA exemption is only available for rented accommodations. If you own the house, you cannot claim this exemption.

Q3: Is rent receipt mandatory for claiming HRA?
A: Yes, you need to submit rent receipts to your employer if your annual HRA exemption exceeds ₹1,00,000.

Q4: What if my landlord doesn't have a PAN?
A: If rent exceeds ₹1,00,000 per year and landlord doesn't have PAN, you need to deduct 5% TDS and submit Form 60.

Q5: Can I claim HRA if I'm paying rent to my parents?
A: Yes, but the payment should be genuine with proper rent agreement and receipts, and your parents may need to show this as income in their tax returns.