What is HRA?

HRA (House Rent Allowance) is a component of your salary paid by your employer to meet your rental expenses. If you live in a rented house, you can claim HRA exemption on your income tax under Section 10(13A) of the Income Tax Act.

HRA Exemption Rules

The exempt amount is the minimum of three values:

1. Actual HRA received from employer
2. 50% of basic salary (metro) or 40% (non-metro)
3. Rent paid − 10% of basic salary

The lowest of the three is your HRA exemption. The remaining HRA is taxable.

Example Calculation

Basic = ₹6,00,000/year, HRA received = ₹2,40,000, Rent paid = ₹3,00,000, Non-metro:

• Actual HRA = ₹2,40,000
• 40% of basic = ₹2,40,000
• Rent − 10% basic = ₹3,00,000 − ₹60,000 = ₹2,40,000
• Exemption = ₹2,40,000 (min of three)

Metro vs Non-Metro

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

Who Can Claim HRA?

• Salaried employees with HRA in salary structure
• Those living in rented accommodation
• Those paying rent to landlord (not to family unless specific conditions)

Documents Needed

• Rent receipts (if rent > ₹1 lakh/year, landlord PAN required)
• Rent agreement
• Form 12BB declaration to employer

Why Use Our HRA Calculator?

Calculate your exact HRA exemption in seconds. Plan your taxes better and maximize your take-home salary legally.