HRA Exemption
Calculate the taxable and tax-exempt portion of your House Rent Allowance.
Calculation Summary
For salaried employees living in rented accommodation, House Rent Allowance (HRA) is one of the most significant tax-saving tools. Under Section 10(13A) of the Income Tax Act, a substantial portion of the HRA you receive can be declared tax-free, lowering your overall tax liability.
📐 The Rule of 3 (Calculation Logic)
The Income Tax department calculates the HRA exemption as the LOWEST of the following three amounts:
- Actual HRA Received: The exact amount listed in your salary slip.
- 50% / 40% of Salary: 50% of (Basic + DA) if you live in a Metro city. 40% for Non-Metro cities.
- Rent - 10% of Salary: Actual Rent Paid minus 10% of (Basic + DA).
Metro vs Non-Metro Cities: The Classification
The government defines "Metro" strictly for HRA purposes. Only Delhi, Mumbai, Kolkata, and Chennai qualify for the 50% rule.
Other major tech hubs like Bangalore, Hyderabad, Pune, Gurgaon, and Noida are considered "Non-Metro", meaning you can only claim 40% of your Basic Salary in that calculation step.
Frequently Asked Questions
Is Landlord's PAN mandatory?
Yes, if your annual rent payment exceeds ₹1,00,000 (approx ₹8,333 per month), you must provide your landlord's PAN to your employer to claim the exemption.
Can I claim HRA if I pay rent to parents?
Yes, but you must have a valid rent agreement and proof of payment (bank transfer). Your parents must also declare this rental income in their ITR.
Related Calculators
Home Loan EMI
Calculate monthly EMI and total interest payable on your home loan.
Loan Prepayment
See how prepaying your loan can reduce your tenure and save interest.
Personal Loan EMI
Compute the Equated Monthly Installment for personal or car loans.
GST Calculator
Calculate the Goods and Services Tax amount inclusive or exclusive of price.
