HRA Calculator
Calculate HRA Exemption in Seconds
House Rent Allowance (HRA) is a component of your salary that helps cover rental expenses. Under Section 10(13A) of the Indian Income Tax Act, 1961, HRA can be partially or fully exempt from income tax if you live in rented accommodation.
With PayrollRabbit, you can instantly calculate HRA exemption amounts based on your salary, rent paid, and city of residence. Perfect for salaried employees, tax professionals, and HR managers wanting to determine HRA tax benefits under the old tax regime.
HRA Exemption Calculation Results
The least of the below values is exempt from HRA
Final HRA Calculation
Calculation Formula
Total Salary: Basic Salary + Dearness Allowance = ₹0
10% of Salary: ₹0
Rent in excess of 10%: ₹1,80,000 - ₹0 = ₹0
50% of Basic Salary: ₹5,00,000 × 50% = ₹0
Exempted Amount: Minimum of (₹0, ₹0, ₹0) = ₹0
Step-by-Step Explainer
How is HRA calculated?
Calculate HRA in India in 4 simple steps:
Enter Salary Details
Input employee's annual Basic Salary and any Dearness Allowance (DA). These figures form the base for the HRA calculation.
Provide HRA and Rent Amounts
Enter the total annual House Rent Allowance (HRA) the employee receives from their employer and the total annual rent the employee pays.
Select City Type
Specify whether the employee lives in a metro city (Delhi, Mumbai, Kolkata, Chennai) or a non-metro city to apply the correct calculation rules.
Review Your HRA Exemption
The calculator instantly displays the exempted HRA amount, any taxable portion, and a clear breakdown of the calculation formula.
Frequently asked questions
Visit our full FAQ page or get in touch with Frederic, Co-Founder of PayrollRabbit.
- HRA is a component of your salary provided by employers to help cover rental expenses. It's a tax-beneficial allowance under Section 10(13A) of the Income Tax Act, 1961, that can be partially or fully exempt from income tax if you live in rented accommodation.
- HRA exemption is calculated as the minimum of three values: (1) Actual HRA received from employer, (2) Rent paid minus 10% of salary (Basic + DA), (3) 50% of basic salary for metro cities or 40% for non-metro cities. The lowest amount among these three is exempt from tax.
- No, HRA exemption is only available under the old tax regime. If you choose the new tax regime, you cannot claim HRA exemption under Section 10(13A). This is one of the key factors to consider when deciding between old and new tax regimes.
- Metro cities for HRA calculation include Delhi, Mumbai, Kolkata, and Chennai. Employees living in these cities can claim HRA exemption up to 50% of their basic salary, while those in non-metro cities can claim up to 40% of basic salary.
- You need rent receipts as proof of rent payment. If your annual rent exceeds ₹1 lakh, your landlord's PAN (Permanent Account Number) is mandatory. For rent below ₹1 lakh, a rent agreement is not mandatory, but rent receipts are advisable as supporting documents.
- No, you cannot claim HRA exemption if you live in your own house. HRA exemption is only available if you live in rented accommodation. If you live in your own property, the entire HRA received from your employer will be fully taxable.
- Yes, you can claim both HRA exemption and home loan deductions simultaneously if you live in a rented property while also paying a home loan for another property you own. However, you need to justify why you're not living in your owned property with valid reasons.
- P.a. stands for 'per annum', which means annually or per year. When using our HRA calculator, enter all amounts as yearly figures. For example, if your monthly rent is ₹15,000, enter ₹1,80,000 (₹15,000 × 12 months) in the calculator.
- Yes, you can pay rent to your parents and claim HRA exemption, provided your parents are the house owners and they declare this rent as income from house property in their income tax returns. You must have proper rent receipts and rental agreement as supporting documents.
- For HRA calculation, 'salary' typically includes basic salary plus dearness allowance (DA). The 10% calculation is done on this combined amount (Basic + DA), not on the gross salary. Other allowances like conveyance allowance or special allowances are generally not included in this calculation.
- There is no specific maximum limit on HRA exemption amount. However, the exemption is naturally limited by the calculation formula - it cannot exceed the actual HRA received, rent paid minus 10% of salary, or 40%/50% of basic salary, whichever is lowest.
- Choose the old tax regime if you have significant deductions like HRA exemption, Section 80C investments, or Section 80D medical insurance premiums. Choose the new tax regime if you have minimal deductions and want to benefit from lower tax rates and higher standard deduction of ₹75,000.