1. What is HRA Exemption?

HRA (House Rent Allowance) exemption is a tax benefit available to salaried individuals who live in rented accommodation. The exemption is calculated as the minimum of three components: actual HRA received, rent paid minus 10% of salary, or 50%/40% of salary depending on city type.

2. How Does the Calculator Work?

The calculator uses the HRA exemption formula:

Where:

• HRA Received — Actual HRA component from your salary
• Rent Paid — Total rent paid for the accommodation
• Salary — Basic salary component
• 50% of salary — For metro cities (Delhi, Mumbai, Chennai, Kolkata)
• 40% of salary — For non-metro cities

Explanation: The exemption is calculated as the least of these three values to ensure fair tax benefits.

3. Importance of HRA Exemption

Details: Proper calculation of HRA exemption can significantly reduce your taxable income, leading to lower tax liability. It's essential to claim this correctly in your income tax returns.

4. Using the Calculator

Tips: Enter all values in Indian Rupees (₹). Provide accurate figures from your salary slip and rent receipts. The calculator will determine the exempt amount of your HRA.

5. Frequently Asked Questions (FAQ)

Q1: What documents are needed to claim HRA exemption?
A: You need rent receipts (with landlord PAN if rent exceeds ₹1,00,000 annually) and proof of rent payment.

Q2: Can I claim HRA if I live with my parents?
A: Yes, if you pay rent to your parents and have proper documentation.

Q3: What if my actual rent is higher than HRA received?
A: You can only claim exemption up to the HRA received amount.

Q4: Is there any limit to HRA exemption?
A: The exemption is limited by the three components in the formula.

Q5: Can I claim HRA if I own a house?
A: No, HRA exemption is only available if you're paying rent for accommodation.