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HRA Exemption Calculator
Calculate House Rent Allowance exemption under Section 10(13A) of the Indian Income Tax Act with all three rules, metro/non-metro rates, and tax savings.
HRA Exemption (Monthly)⧉
₹10,000.00
Lowest of the three rules (tax-free)
Taxable HRA (Monthly)⧉
₹10,000.00
HRA received minus exemption
Annual Exemption⧉
₹120,000.00
Total HRA exemption for the year
Rule 1: Actual HRA⧉
₹20,000.00
HRA received from employer
Rule 2: Rent − 10% Basic⧉
₹10,000.00
₹15,000.00 − ₹5,000.00
Rule 3: 50% of Basic+DA⧉
₹25,000.00
50% of ₹50,000.00
Tax Savings (30% slab)⧉
₹36,000.00
Annual savings if in 30% bracket
Tax Savings (20% slab)⧉
₹24,000.00
Annual savings if in 20% bracket
Three-Rule Comparison
Rule 1: Actual HRA₹20,000.00
Rule 2: Rent − 10%₹10,000.00 ✓
Rule 3: 50% Basic₹25,000.00
| Month | HRA | Exemption | Taxable | Cum. Exemption |
|---|---|---|---|---|
| Jan | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹10,000.00 |
| Feb | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹20,000.00 |
| Mar | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹30,000.00 |
| Apr | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹40,000.00 |
| May | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹50,000.00 |
| Jun | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹60,000.00 |
| Jul | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹70,000.00 |
| Aug | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹80,000.00 |
| Sep | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹90,000.00 |
| Oct | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹100,000.00 |
| Nov | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹110,000.00 |
| Dec | ₹20,000.00 | ₹10,000.00 | ₹10,000.00 | ₹120,000.00 |
Planning notes, formulas, and examples
About the HRA Exemption Calculator
House Rent Allowance (HRA) is a common salary component in India that offers significant tax savings under Section 10(13A) of the Income Tax Act. The exemption is calculated as the minimum of three amounts: actual HRA received, rent paid minus 10% of basic salary plus dearness allowance, and 50% (metro) or 40% (non-metro) of basic salary plus DA.
Understanding HRA exemption is crucial for Indian salaried employees as it directly reduces taxable income. The exemption applies only under the old tax regime — employees opting for the new tax regime cannot claim HRA exemption. Metro cities for HRA purposes are Delhi, Mumbai, Chennai, and Kolkata; all other cities are classified as non-metro.
This calculator computes your HRA exemption using all three rules, shows which rule gives the lowest (and therefore applicable) amount, and projects annual tax savings across different income tax slabs. It helps you optimize your rent payments and salary structure for maximum tax efficiency.
When This Page Helps
HRA exemption is one of the main tax-planning items for Indian salaried employees who still use the old tax regime. This calculator shows which of the three statutory limits actually controls the exemption, how much HRA remains taxable, and how rent, salary, and city classification change the result.
How to Use the Inputs
- Enter your monthly basic salary amount
- Enter the monthly HRA component received from employer
- Input the actual monthly rent you pay for accommodation
- Add dearness allowance if applicable
- Select whether you live in a metro city (Delhi, Mumbai, Chennai, Kolkata)
- Review the three-rule comparison and your exemption amount
- Check annual tax savings at your applicable tax slab
Formula used
HRA Exemption = Minimum of:
1. Actual HRA received from employer
2. Rent paid − 10% of (Basic Salary + DA)
3. 50% of (Basic + DA) for metro cities, or 40% for non-metro
Taxable HRA = HRA Received − Exemption AmountExample Calculation
Result: ₹10,000 monthly exemption
Rule 1: ₹20,000 (actual HRA). Rule 2: ₹15,000 − ₹5,000 = ₹10,000. Rule 3: 50% of ₹50,000 = ₹25,000. Minimum is ₹10,000 (Rule 2). Annual exemption: ₹1,20,000.
Tips & Best Practices
- If Rule 2 limits your exemption, consider increasing rent (and getting actual value for it)
- Paying rent to parents is a legitimate way to claim HRA — ensure proper documentation
- Keep rent receipts and agreements as proof for income tax assessment
- Compare old vs new tax regime — HRA exemption only benefits under the old regime
- PAN of landlord is mandatory if annual rent exceeds ₹1,00,000
Three-Rule Comparison
HRA exemption is always the minimum of the three statutory tests, so the most useful output is the rule-by-rule breakdown. In many salary structures the limiting rule is rent paid minus 10% of basic salary plus DA, not the HRA amount shown on the payslip.
Old Regime Only
The exemption is generally relevant only under the old Indian tax regime. If you are comparing old versus new regime outcomes, use the HRA result together with your other deductions instead of viewing it in isolation.
Documentation Matters
Keep rent receipts, the rent agreement, and the landlord PAN details when required. The tax math can be correct and still fail in practice if the supporting documents do not match the claim.
Sources & Methodology
Last updated:
Methodology
This worksheet applies the standard three-part HRA exemption test used under Section 10(13A) and Rule 2A. It compares actual HRA received, rent paid minus 10% of basic salary plus eligible dearness allowance, and 50% of basic plus eligible dearness allowance for metro cities or 40% for non-metro cities. The exemption is the lowest positive value from those three tests, and the balance of HRA remains taxable.
The page is designed as an arithmetic aid for old-regime planning. It does not determine whether you are eligible for the old regime, whether the dearness allowance portion qualifies for retirement benefits, or whether your supporting rent documentation is sufficient for employer payroll or tax assessment purposes.
Sources
- Rule 2A - Limits for the Purposes of Section 10(13A) (Income Tax Department, Government of India)
Frequently Asked Questions
HRA exemption allows salaried employees to claim a portion of their House Rent Allowance as tax-free income under Section 10(13A) of the Income Tax Act, reducing taxable income under the old regime.
Only four cities qualify as metro: Delhi, Mumbai, Chennai, and Kolkata. Employees in these cities get 50% of basic+DA as the Rule 3 limit instead of 40%.
No. HRA exemption requires that you actually pay rent for accommodation. If Rule 2 (rent − 10% of basic) is negative, the exemption is zero.
No. HRA exemption under Section 10(13A) is only available under the old tax regime. The new regime offers lower rates but no HRA deduction.
Yes, you can pay rent to parents and claim HRA exemption. However, the landlord (parent) must declare the rental income. You cannot claim HRA paying rent to your spouse.
Rent receipts, rent agreement, and landlord's PAN (if annual rent exceeds ₹1,00,000). Some employers accept a declaration form for rent payments.
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