HRA Calculator — Calculate House Rent Allowance Exemption Free
Calculate your HRA tax exemption in seconds. Enter basic salary, HRA received, and rent paid — the calculator applies all 3 conditions and shows exactly how much is tax-free and your annual tax saving.
Your Salary & Rent Details
Basic component of your CTC, not gross salary
Check your salary slip for the HRA component
Must be for a rented accommodation; own house not eligible
Used to estimate tax savings only
HRA Exemption Calculation
Minimum of 3 conditions
Monthly HRA Exemption
₹20,000.00
Taxable HRA (monthly)
₹0.00
Annual HRA Exemption
₹2,40,000.00
Est. Annual Tax Saving
₹72,000.00
at 30% slab
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How to Calculate HRA Exemption Online
- 1Enter your monthly Basic Salary — the basic component from your salary slip (not gross salary or CTC).
- 2Enter HRA Received from your employer per month — visible on your salary slip as "HRA" or "House Rent Allowance".
- 3Enter the Actual Rent you pay per month to your landlord.
- 4Select your city type: Metro (Delhi, Mumbai, Chennai, Kolkata) gets 50% of basic; all other cities get 40%.
- 5Choose your income tax slab to see the estimated annual tax saving from your HRA exemption.
HRA Exemption Formula & Calculation Method
HRA exemption under Section 10(13A) is the minimum of three conditions:
Condition 1
Actual HRA received from employer
Condition 2
50% of Basic Salary (Metro) or 40% of Basic Salary (Non-Metro)
Condition 3
Rent Paid − 10% of Basic Salary (minimum ₹0)
HRA Exemption = Min(Condition 1, Condition 2, Condition 3)
Taxable HRA = HRA Received − HRA Exemption
Metro cities (Delhi, Mumbai, Chennai, Kolkata) get 50% of basic in Condition 2. All other cities get 40%. This recognises the higher rental costs in metro areas.
HRA Exemption Example with Indian Numbers
Software engineer in Bengaluru (Non-Metro): Basic ₹60,000/month, HRA ₹24,000/month, Rent paid ₹20,000/month
| Condition 1 — Actual HRA | ₹24,000 |
| Condition 2 — 40% of Basic (Non-Metro) | ₹24,000 |
| Condition 3 — Rent (₹20,000) − 10% of Basic (₹6,000) | ₹14,000 |
| HRA Exemption (Minimum) | ₹14,000/month |
| Annual HRA Exemption | ₹1,68,000 |
| Estimated Tax Saving (at 30%) | ₹50,400/year |
Condition 3 is the binding constraint here. The employee saves ₹50,400 annually in income tax through HRA exemption alone.
Common HRA Mistakes to Avoid
Using gross salary instead of basic salary
Conditions 2 and 3 use Basic Salary — not gross salary, not CTC. Basic salary is typically 40–60% of gross. Using gross salary overstates the exemption and can lead to tax notices.
Claiming HRA in new tax regime
HRA exemption is not available under the new tax regime. Many employees switch to new regime for lower rates but forget they lose HRA, 80C, and other deductions. Always compare both regimes before choosing.
Not collecting rent receipts and landlord PAN
For rent above ₹1 lakh/year (₹8,333/month), the landlord's PAN is mandatory. Employers can reject HRA claims without it, and the Income Tax Department can disallow the exemption during scrutiny.
Paying rent in cash without bank trail
Paying rent in cash above ₹8,333/month without any bank trail creates a risk during tax scrutiny. Always use NEFT, UPI, or cheque so you have a verifiable payment record to match with rent receipts.
Frequently Asked Questions — HRA Exemption
Q: What is HRA (House Rent Allowance)?
HRA is a component of an employee's salary provided by the employer to help cover rental accommodation costs. It is partially or fully exempt from income tax under Section 10(13A) of the Income Tax Act, making it one of the most valuable tax-saving tools for salaried individuals in India.
Q: How is HRA exemption calculated — what are the 3 conditions?
HRA exemption is the minimum of three amounts: (1) Actual HRA received from the employer; (2) 50% of basic salary if you live in a metro city (Delhi, Mumbai, Chennai, Kolkata) or 40% of basic salary for non-metro cities; (3) Actual rent paid minus 10% of basic salary. The lowest of these three is the tax-exempt HRA. The remaining HRA (if any) is added to taxable income.
Q: Which cities qualify as "metro" for HRA exemption?
Only four cities are classified as metro for HRA purposes under the Income Tax Act: Delhi, Mumbai (including Navi Mumbai and Thane), Kolkata, and Chennai. All other cities — including Bangalore, Hyderabad, Pune, Ahmedabad — are treated as non-metro, qualifying for only 40% of basic salary as the Condition 2 limit.
Q: Can I claim HRA exemption if I live in my own house?
No. HRA exemption is only available if you actually pay rent for a rented accommodation. If you live in your own house or in a house owned by your spouse, you cannot claim HRA exemption — even if your salary includes an HRA component. In that case, the full HRA received is taxable.
Q: Can I claim HRA if I pay rent to my parents?
Yes, you can pay rent to your parents and claim HRA exemption, provided: (1) The house is legally in your parent's name, (2) You actually transfer rent to them via bank transfer, (3) Your parents declare the rental income in their own ITR. This is a legitimate tax planning strategy. However, rent paid to a spouse is NOT allowed.
Q: What documents do I need to claim HRA exemption?
For rent up to ₹1 lakh per year (₹8,333/month): only rent receipts are needed. For rent above ₹1 lakh/year: rent receipts PLUS landlord's PAN is mandatory. Documents to maintain: signed rent agreement, monthly rent receipts with landlord's signature, and bank transfer statements showing rent payments.
Q: Is HRA exemption available under the new tax regime?
No. HRA exemption under Section 10(13A) is NOT available under the new tax regime introduced in FY 2020-21. The new regime offers lower tax rates but disallows most deductions and exemptions including HRA, 80C, 80D, and LTA. To claim HRA exemption, you must opt for the old tax regime when filing your ITR.
Q: What if rent paid is less than 10% of basic salary?
If your rent paid is less than 10% of your basic salary, Condition 3 becomes zero — meaning your HRA exemption is nil regardless of HRA received or Condition 2. This happens when basic salary is very high relative to rent. Example: basic ₹80,000, rent ₹7,000 — 10% of basic = ₹8,000 > rent paid, so Condition 3 = ₹0.
Q: What is the maximum HRA exemption limit?
There is no fixed maximum cap on HRA exemption — it depends on the three-condition minimum formula. However, the exemption is naturally capped by the actual HRA received (Condition 1). In practice, for high earners in metro cities, Condition 3 (excess rent) often becomes the binding constraint. There is no separate ceiling under Section 10(13A).
Q: How does HRA exemption affect my ITR filing?
When filing your ITR, report the HRA details in Schedule EI (Exempt Income) or in the salary schedule depending on the ITR form. The employer typically accounts for HRA exemption when computing TDS, but you must provide proof (rent receipts + landlord PAN if applicable) to HR before year-end. If the employer did not reduce TDS for HRA, you can still claim the exemption directly in your ITR and get a refund.
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