HRA Calculator (House Rent Allowance Exemption)

Work out the exact tax-free portion of your House Rent Allowance. Evaluates all three statutory limits under Rule 2A to calculate your tax exemption and annual tax savings.

With a monthly basic salary of ₹50,000, HRA of ₹25,000, and rent of ₹20,000 in a metro city, your tax-exempt HRA is ₹15,000 per month (₹1,80,000/year), saving ₹56,160 in annual tax at the 30% slab.

HRA & Rent Details

Calculate your tax exemption on House Rent Allowance under Section 10(13A) read with Rule 2A.

Basic Salary (Per Month)

₹

Your basic salary + dearness allowance (DA) if considered for retirement benefits.

HRA Received from Employer (Per Month)

₹

Actual House Rent Allowance component stated on your salary payslip.

Rent Paid for Rented Accommodation (Per Month)

₹

Actual rent paid to your landlord backed by rent receipts or rent agreement.

Accommodation City

Exempt HRA (Tax-Free)

₹15,000

Annual exemption: ₹1,80,000

Taxable HRA

₹10,000

Annual taxable: ₹1,20,000

Tax Saved at 30% Slab

₹56,160

Annual tax reduction including 4% cess

Tax Saved at 20% Slab

₹37,440

Annual tax reduction including 4% cess

Rule 2A Statutory Calculation (Annual)

Under Section 10(13A), your tax exemption is strictly the lowest of these three statutory amounts:

1. Actual HRA ReceivedFrom employer payslip

₹3,00,000

2. Rent Paid Minus 10% Basic₹₹2,40,000 - ₹₹60,000

₹1,80,000Lowest (Exempt)

3. 50% of Basic SalaryMetro benchmark limit

₹3,00,000

Exempt HRA (Per Month)

₹15,000

Taxable HRA: ₹10,000

Ensure you maintain valid rent receipts, a registered lease agreement, and banking trail. If annual rent exceeds ₹1,00,000, your employer requires the landlord's PAN for tax verification.

What it is:: A statutory tax tool for calculating House Rent Allowance exemption under Section 10(13A).
What it calculates:: Tax-free HRA, taxable HRA, and estimated tax saved across individual income tax slabs.

Key Assumptions

Rule 2A statutory 3-limb minimum comparison.
Metro definition restricted to Delhi, Mumbai, Kolkata, and Chennai.
Basic salary includes Dearness Allowance where applicable.
Applicable only under the Old Tax Regime.

How it works

Section 10(13A) of the Income Tax Act, 1961 read with Rule 2A provides tax exemption on HRA received by salaried individuals living in rented accommodation.

The exemption is strictly the lowest of three statutory amounts: (1) Actual HRA received, (2) Actual rent paid minus 10% of basic salary (+ DA), or (3) 50% of basic salary for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metro cities.

If the rent paid does not exceed 10% of your basic salary, the exempt HRA is zero, and the entire allowance is taxable.

HRA exemption is available only under the Old Tax Regime; it cannot be claimed under the default New Tax Regime (Section 115BAC).

Formula

Exempt HRA = Minimum of [Actual HRA, Rent Paid - (10% x Basic), 50% or 40% of Basic]; Taxable HRA = Actual HRA - Exempt HRA

Basic: = Basic Salary + Dearness Allowance (DA) considered for retirement
HRA: = Actual House Rent Allowance received from employer
Rent: = Actual rent paid for residential accommodation
Metro: = 50% applies to Delhi, Mumbai, Kolkata, Chennai; 40% elsewhere

Landlord's PAN is mandatory on Form 12BB if annual rent paid exceeds ₹1,00,000.

Example calculation

Monthly Basic ₹50k, HRA ₹25k, Rent ₹20k (Metro City)

Actual Monthly HRA Received: ₹25,000
Rent Paid Minus 10% Basic: ₹15,000
50% of Basic Salary (Metro): ₹25,000
Exempt HRA (Lowest of the three): ₹15,000/mo (₹1,80,000/yr)
Taxable HRA: ₹10,000/mo (₹1,20,000/yr)
Estimated Annual Tax Saved (30% slab): ₹56,160

Frequently asked questions

Which cities qualify for the 50% metro HRA exemption limit?

Under Rule 2A of the Income Tax Rules, only four cities legally qualify for the 50% limit: Delhi (NCR municipal limits), Mumbai, Kolkata, and Chennai. Tech hubs like Bengaluru, Hyderabad, and Pune are classified as non-metro and capped at 40%.

Can I claim HRA exemption under the New Tax Regime?

No. Under the New Tax Regime (Section 115BAC), HRA exemption under Section 10(13A) is not permitted. To claim HRA tax benefits, you must opt for the Old Tax Regime.

Can I claim both HRA exemption and home loan tax benefits?

Yes, provided the rented home and the owned home are in different cities or justifiable commute distances (e.g., employment location differs from property location). You can claim HRA for rent paid and Section 24(b) interest deduction on your home loan simultaneously.

Can I pay rent to my parents and claim HRA?

Yes, you can pay rent to parents if they own the property and you have formal rent receipts, a rental agreement, and bank transaction proof. The parents must declare this rental income in their personal income tax returns.

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