What is HRA Exemption Calculator?

HRA Exemption Calculator calculates the amount that can be exempted from the taxable income of an employee with respect to the House Rent Allowance received from the employer and the House Rent paid by the employee.

HRA Exemption Calculator enables you to save income tax on House Rent Allowance.

Eligibility criteria for HRA Exemption

  • You should have received House Rent Allowance from your employer

  • You should have paid House Rent to your Landlord

How to calculate HRA Exemption?

HRA exemption is calculated as the least of the following :

  • Actual HRA received from the employer

  • Rent Paid over 10% of (Basic Pay + DA + Commission)

  • If employee is living in a Metro City ( Chennai ,Delhi, Kolkata or Mumbai ) then
      50% of (Basic Pay + DA + Commission)
      40% of (Basic Pay + DA + Commission)

Proofs to submit to claim HRA Exemption

  • Rent Receipts, if rent is more than INR 3000 per month

  • Permanent Account Number(PAN) and address of the landlord, if rent is more than INR 8333 per month

Step 1: Open the Income Tax Calculator

Step 2: Fill in basic details

Calculate HRA Exemption

Step 3: Key in your salary details

House Rent Allowance
HRA Exemption Deduction

Step 4: Declare your rent

Declare HRA exemption

Step 5: Compute Income Tax

Compute HRA Exemption

Step 6: Calculation Summary for HRA Exemption

As per your payslip, you are paid HRA of INR 384000.

HRA Exemption Summary

The rent you paid over 10% of Basic Pay + DA + Commission is INR 144000.

Income Tax HRA Exemption

And 40% of Basic Pay + DA + Commission comes to INR 384000.

Income Tax HRA Exemption Calculator

The least of the three is calculated as your HRA exemption.

Income Tax HRA Exemption

So, as per the calculation, HRA exemption is INR 144000.

 HRA Exemption

Step 7: What if you move to a more expensive rented house?

Assume you are moving to a new house with rent of INR 30000. Let’s see what change it makes to your HRA exemption. Let’s make that change in the rent declaration.

HRA Declaration

Now, let’s compute the tax again.

HRA Exemption Computation

Your HRA exemption earlier was INR 144000. And now, the HRA exemption with a higher rent is INR 264000.

HRA exemption calculation

So, even if you move to a more expensive rented house, you can save up to 30% of increase in rent with HRA exemption.

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The HRA Exemption calculator helps you understand the exemption calculation process and also helps you save income tax.

Frequently Asked Questions

Can I claim HRA Exemption if I’m living in my own house?

No, you cannot. You may be receiving House Rent Allowance from your employer, but you don’t have rent receipts to claim HRA Exemption.

Can I claim HRA Exemption if I’m living with my parents?

Yes, you can, if the house property is owned by your parents. You should get rent receipts from your parents.

What if I pay rent but do not receive HRA from my employer?

In this case, you cannot claim HRA exemption. But, you can claim a deduction under Section 80GG.