FinCalc

HRA Exemption Calculator

Calculate your HRA tax exemption amount

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City Type

Metro: Delhi, Mumbai, Chennai, Kolkata (50% of salary). Non-metro: 40%.

HRA Exempt (Tax-Free)

₹2,40,000

Per year

Taxable HRA

₹0

Added to your taxable income

HRA Exemption is the minimum of:

1. Actual HRA received₹2,40,000
2. Rent paid − 10% of salary₹2,40,000
3. 50% of salary₹3,00,000

What is a HRA Exemption Calculator?

House Rent Allowance (HRA) exemption is one of the most valuable tax benefits available to salaried individuals living in rented accommodation. However, the exempt amount isn't simply the HRA you receive — it's the minimum of three complex conditions. This calculator determines exactly how much of your HRA is tax-exempt and how much is taxable.

Many employees either claim too little (missing out on legitimate tax savings) or don't claim at all because the rules seem confusing. The exemption depends on your basic salary, the HRA component, actual rent paid, and whether you live in a metro city — all of which this calculator handles.

When to Use This Calculator

  • Calculating your HRA exemption when filing income tax returns
  • Deciding whether to claim HRA or home loan interest (you can claim both if conditions are met)
  • Comparing the tax benefit of HRA in a metro vs non-metro city
  • Planning rent payments to maximize HRA exemption
  • Understanding how a salary restructure affects your HRA tax benefit

Key Terms

HRA

House Rent Allowance — a component of salary paid by employers to help employees cover rent. The exemption is available only under the Old Tax Regime.

Metro City

For HRA purposes, only Delhi, Mumbai, Chennai, and Kolkata are classified as metro cities (50% of basic salary exemption). All other cities get 40%.

Basic Salary

The base component of your salary, excluding allowances, bonuses, and perks. HRA exemption is calculated as a percentage of basic salary (plus DA if applicable).

Frequently Asked Questions

How is HRA exemption calculated?+
The exempt HRA is the minimum of: (1) Actual HRA received, (2) 50% of basic salary for metro cities / 40% for non-metro, (3) Actual rent paid minus 10% of basic salary. The lowest of these three is exempt from tax.
Can I claim HRA if I own a house in a different city?+
Yes. If you own a house in one city and live in a rented house in another city for work, you can claim both HRA exemption (on rent paid) and home loan interest deduction (on the owned house). There's no conflict.
Do I need rent receipts to claim HRA?+
Yes, if annual rent exceeds ₹1 lakh. You need rent receipts with your landlord's name, address, rent amount, and signature. If rent exceeds ₹1 lakh/year, you must also provide the landlord's PAN. Many companies require monthly receipts.
Can I claim HRA if I pay rent to my parents?+
Yes, this is a legitimate and common tax-saving strategy. Pay rent to your parents via bank transfer, get rent receipts, and claim HRA. Your parents declare the rental income in their return — if they're in a lower tax bracket, the family saves tax overall.
Is HRA available under the New Tax Regime?+
No. HRA exemption is available only under the Old Tax Regime. If you choose the New Regime, you cannot claim HRA — but the New Regime has lower rates and a higher standard deduction that may compensate. Use our Income Tax Calculator to compare.