Rent Deduction Calculator

HRA Deduction Formula:

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

Actual HRA:

₹

Salary:

₹

Rent Paid:

₹

City Type:

HRA Deduction:

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1. What is HRA Deduction?

The House Rent Allowance (HRA) deduction is a tax benefit available to salaried individuals in India who live in rented accommodation. The deduction is calculated as the minimum of three components: actual HRA received, a percentage of salary (50% for metro cities or 40% for non-metro cities), or rent paid minus 10% of salary.

2. How Does the Calculator Work?

The calculator uses the HRA deduction formula:

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

Where:

\( \text{Actual HRA} \) — House Rent Allowance received from employer (₹)
\( \text{Salary} \) — Basic salary + Dearness Allowance (if applicable) (₹)
\( \text{Rent Paid} \) — Total rent paid for the accommodation (₹)
\( 50\% \text{ or } 40\% \) — Percentage based on city type (metro or non-metro)

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

3. Importance of HRA Calculation

Details: Accurate HRA deduction calculation helps maximize tax savings while complying with Indian income tax regulations. It's particularly important for salaried individuals living in rented accommodations.

4. Using the Calculator

Tips: Enter actual HRA received, your basic salary + DA, total 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 purposes?
A: Delhi, Mumbai, Kolkata, and Chennai are considered metro cities. All others are non-metro.

Q2: Can I claim HRA 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?
A: Rent receipts and potentially rent agreement (especially for high rent amounts). PAN of landlord is required if rent exceeds ₹1 lakh annually.

Q4: Can I claim HRA if I don't receive it in my salary?
A: No, the exemption is only available against actual HRA received from your employer.

Q5: Is there any limit to HRA exemption?
A: There's no fixed limit - the exemption is calculated as per the formula, but must be supported by actual rent payments and receipts.