HRA Exemption Calculator

The HRA exemption rule

Salaried employees who receive house rent allowance and actually pay rent can claim part of it as tax-exempt under section 10(13A) of the Income Tax Act, in the old tax regime. The exempt amount is the lowest of three figures, calculated for the period you rented:

1. The actual HRA received from your employer.
2. Rent paid minus 10% of salary (basic + DA forming part of retirement benefits).
3. 50% of salary if you live in a metro (Delhi, Mumbai, Kolkata, Chennai), otherwise 40%.

The rest of the HRA is taxable. The calculator shows all three limits so you can see which one decides your exemption.

Example

Basic ₹40,000/month, HRA ₹20,000/month, rent ₹18,000/month in Mumbai. Yearly: HRA ₹2.4 lakh; rent minus 10% of salary = ₹2.16 lakh − ₹48,000 = ₹1.68 lakh; 50% of salary = ₹2.4 lakh. The exemption is ₹1.68 lakh and ₹72,000 of HRA is taxable.

Increasing your exemption

• The exemption grows with rent, until it hits one of the other two limits.
• Paying rent to parents is allowed if they genuinely own the house and declare the rent as income. Paying rent to your spouse is generally not accepted.
• You cannot claim HRA exemption for a house you own and live in.

Documents

Employers usually ask for rent receipts, and the landlord’s PAN if annual rent exceeds ₹1 lakh. Make receipts with our rent receipt generator.

New regime note

HRA exemption isn’t available in the new tax regime. Compare regimes with the income tax calculator by entering your HRA exemption as a deduction in the old regime.

Claiming HRA if your employer missed it

If you forgot to submit rent receipts to your employer, you can still claim the HRA exemption while filing your income tax return in the old regime, keeping receipts and payment proof ready in case the tax department asks for them.