HRA Calculator

HRA Calculator

Basic Salary (p.a.)

HRA received (p.a.)

Dearness allowance (p.a)

Total rent paid (p.a)

Estimated HRA Exemption

Exempted HRA

₹4,000

Taxable HRA

₹1,000

HRA Calculator

Are you aware that House Rent Allowance (HRA) is not just a salary component but also a powerful tool to help you save on taxes?

Many salaried employees overlook this essential benefit, missing out on significant tax savings. HRA is designed to assist with rental expenses.

The amount of HRA you’re eligible for depends on factors such as your salary structure, monthly earnings, and the city where you reside. But did you know you can reduce your taxable income by calculating it strategically? 

What is the HRA Calculator?

In recent years, the cost of living in Indian cities has surged dramatically, fueled by inflation and rising disposable incomes. For employees living in rented homes, managing these expenses can be challenging.

This is where the House Rent Allowance (HRA) comes into play. Many organizations offer HRA to ease the burden of rent. Understanding how to calculate your HRA is crucial for maximizing its benefits.

Share. Market’s HRA calculator will help you determine the allowance you’re entitled to, ensuring you’re fully aware of your tax exemptions.

With the 7th Pay Commission reforms, HRA slabs have been redefined, categorizing Indian cities into three distinct groups: 

  1. Slab X encompasses the most expensive urban areas, where a higher HRA exemption is necessary
  2. Slab Y represents cities with relatively lower living costs, offering a moderate allowance 
  3. Slab Z includes smaller towns and rural areas where the cost of living is considerably lower, reflecting in a reduced HRA

Maximize Your HRA Benefits with an Easy-to-Use HRA Exemption Calculator

Using an online HRA calculator offers significant benefits for salaried individuals receiving a House Rent Allowance (HRA) from their employer. To claim HRA tax exemptions, there are three key conditions:

  • You must be a salaried employee with HRA included in your salary package 
  • You must be living in rented accommodation
  • Your HRA must exceed 10% of your basic salary

Note: Self-employed individuals do not qualify for this exemption

Our online HRA calculator helps you accurately calculate your tax liability on HRA and offers several other advantages. Depending on the city you live in, House Rent Allowance exemptions differ. 

For example, if you live in a metro city like Mumbai, Bengaluru, Delhi, Chennai, or Kolkata, you can claim a higher HRA of up to 27%. For tier-2 and tier-3 cities, the exemption may be 18% or 9%, respectively.

By using our HRA tax exemption calculator, you can efficiently plan your taxes and financial future based on your salary and location.

How to Calculate Your HRA Exemption

The HRA exemption you can claim is the lowest of the following three amounts:

  1. Actual Rent Paid Minus 10% of Basic Salary: This means the total rent you pay each year minus 10% of your annual basic salary (plus Dearness Allowance, if applicable)
  2. HRA Received from Employer: This is the total House Rent Allowance your employer gives you annually
  3. Limit Based on City
    • Metro Cities (Mumbai, Delhi, Chennai, Kolkata): 50% of your annual basic salary (plus Dearness Allowance, if applicable)
    • Non-Metro Cities: 40% of your annual basic salary (plus Dearness Allowance, if applicable)

Let’s say you live in Delhi (considered a metro city) and earn a monthly basic salary of ₹50,000 with a DA of ₹10,000. You pay a monthly rent of ₹15,000. Here’s how to calculate your HRA exemption:

  1. Actual Rent Paid Minus 10% of Basic Salary
    • Annual Basic Salary + DA = ₹50,000 (basic) + ₹10,000 (DA) = ₹60,000 per month x 12 months = ₹7,20,000 per year
    • 10% of Basic Salary = ₹60,000 x 10/100 = ₹6,000 per month x 12 months = ₹72,000 per year
    • Actual Rent Paid – 10% of Basic Salary = ₹15,000 x 12 – ₹72,000 = ₹1,08,000 per year
  2. HRA Received from Employer: Let’s assume your employer provides an annual HRA of ₹1,20,000
  3. Limit Based on City (Delhi – Metro City): 50% of your annual basic salary + DA = ₹7,20,000 x 50/100 = ₹3,60,000 per year

HRA Exemption

In this example, the lowest amount is your actual rent paid minus 10% of the basic salary (₹1,08,000). So, this is the HRA exemption you can claim on your taxes.

Frequently Asked Questions

Can I claim HRA exemption if I own a house in a different city?

Yes, if you own a house in one city but live in another, you can still claim HRA exemption. Additionally, if you’re paying home loan EMIs on the house you own, you can claim a tax deduction under Section 10(13A). You can use Share.Market HRA calculator to determine your benefits.

Is it possible to claim HRA if I pay rent to my family members?

Yes, you can claim HRA exemption if you pay rent to family members, provided you furnish valid rent receipts and a rental agreement as proof. However, if you or your spouse own the property, you cannot claim this benefit. Use Share.Market HRA calculator to calculate your HRA exemption.

Is it mandatory to provide my landlord’s PAN?

If you pay rent exceeding ₹1 lakh annually and want to claim House Rent Allowance (HRA) tax exemption, your landlord’s PAN is mandatory. Unfortunately, there’s no alternative to this requirement. You must request your landlord to provide their PAN details, as it’s essential for processing your HRA exemption claim.

Can I claim HRA exemption while also claiming home loan tax deductions?

Yes, you can claim both HRA and home loan deductions simultaneously. If you own a home but are staying in a rented property, you’re eligible to claim HRA benefits while repaying your home loan. Utilizing both these tax-saving options can help significantly reduce your taxable income.

Can both spouses claim HRA exemption if they share rent?

Both spouses can claim HRA exemption if they share rent, but only one can claim the benefit unless they provide separate rent receipts. Ensure there is no duplication in claiming HRA, as this can raise red flags with the tax authorities.