HRA Exemption Calculator

How HRA Exemption is Calculated

House Rent Allowance (HRA) exemption is calculated according to Section 10(13A) of the Indian Income Tax Act. The exempted HRA is the minimum of the following three values:

1. Actual HRA Received from Employer
   This is the total HRA amount paid to you by your employer during the financial year. The exemption cannot exceed the HRA actually received.
2. 50% of Salary (Metro) or 40% of Salary (Non-Metro)
   If you live in a metro city (Delhi, Mumbai, Chennai, or Kolkata), up to 50% of your salary is eligible for HRA exemption. For non-metro cities, the limit is 40% of salary.
   Salary here means basic salary plus dearness allowance (DA), if DA forms part of retirement benefits.
3. Rent Paid minus 10% of Salary
   Only the portion of rent that exceeds 10% of your salary is eligible for exemption. If rent paid is less than or equal to 10% of salary, no exemption is available under this rule.

Final HRA Exemption is the lowest of the above three amounts. Any remaining HRA is added to your taxable income.

Note: HRA exemption rules apply only if you are living in a rented house and paying rent. PAN of the landlord is required if annual rent exceeds ₹1,00,000.