HRA Calculator

What this tool does

The HRA Calculator works out how much of your house rent allowance is exempt from tax under the old regime. It compares the three statutory limits for metro and non-metro cities, shows the taxable part and tells you the rent level beyond which the exemption stops increasing.

House rent allowance is a part of salary meant to cover rent. Under section 10(13A) and rule 2A, a salaried person who lives in rented accommodation can treat part of it as exempt from tax. The exempt amount is the least of three figures: the actual HRA received, the rent paid minus 10% of salary, and 50% of salary in Delhi, Mumbai, Kolkata or Chennai or 40% in any other city. Salary here means basic pay plus dearness allowance that counts for retirement benefits.

Enter monthly figures and the calculator computes all three limits for the months you paid rent, picks the smallest and shows the taxable balance. It also gives the monthly rent at which the second limit stops being the binding one, which is useful when deciding how much rent to declare. The exemption applies only under the old tax regime; the new regime does not allow it.

How to use HRA Calculator

1. Enter your monthly basic salary.
2. Enter dearness allowance if it forms part of salary for retirement benefits; otherwise leave 0.
3. Enter the HRA you receive each month as shown on your payslip.
4. Enter the rent you actually pay each month.
5. Choose your city type: one of the four metros (50%) or any other city (40%).
6. Set the number of months you paid rent in the year, then read the exempt and taxable HRA.

Tips for better results

• Keep rent receipts and a rent agreement; employers and the tax department may ask for them.
• If annual rent is above ₹1 lakh, you must give your employer the landlord’s PAN.
• Rent paid to parents can qualify if they own the house and declare the rent as income; rent paid to a spouse usually does not.
• Bengaluru, Hyderabad and Pune count as non-metro for HRA, so the 40% limit applies there.

Common use cases

• Filling in your investment declaration at the start of the year.
• Estimating the tax saving from moving to a rented flat.
• Working out the exempt amount to enter in the income tax calculator.
• Checking your employer’s TDS calculation on the payslip.

Common mistakes to avoid

• Including allowances such as special allowance in salary; only basic plus qualifying DA counts.
• Claiming HRA for months when you did not pay rent or lived in your own house.
• Expecting HRA exemption under the new tax regime.