HRA Calculator FY 2025-26: Calculate HRA Exemption Online
Table of Contents
HRA Calculator
Example of HRA Calculation
HRA Rules
The entire HRA received is not always fully exempt from tax. The least of the following three will be taken to exempt from tax:
(A) HRA received from your employer
(B) Actual rent paid minus 10% of salary
(C) 50% of basic salary for those living in metro cities
(C) 40% of basic salary for those living in non-metro cities
- Basic Monthly Salary = ₹50,000
- HRA Received from Employer = ₹1,00,000
- Total Rent Paid = ₹1,80,000
- Live in Metro City
| Calculation | |||
|---|---|---|---|
| Sr No. | Particulars | Calculation | Amount |
| 1 | Actual HRA Received from Employer | ₹1,00,000 | |
| 2 | Actual Rent Paid – 10% of Salary | 1,80,000 – 10% (50,000*12) | ₹1,20,000 |
| 3 | 50% of Basic Salary | 50% (50,000*12) | ₹3,00,000 |
| Least of the Above | ₹1,00,000 | ||
An HRA calculator is designed to calculate the tax-exempt and taxable portion of your House Rent Allowance. Employees receive HRA from their employers to pay accommodation rents. HRA is mainly governed by the Income Tax Act and helps reduce employees’ tax liability. You need to enter your salary details, rent paid, and city type to get your exempt and total HRA portions.
Key Takeaways:
- HRA calculator helps you split your House Rent Allowance into tax‑exempt and taxable portions for better tax planning.
- It uses inputs like basic salary, DA, HRA received, rent paid, and metro/non‑metro city type to compute HRA accurately.
- HRA exemption is always the lowest of three: actual HRA received, rent minus 10% of salary, and 50% (metro) or 40% (non‑metro) of salary.
- Correct HRA calculation can significantly reduce your taxable income if you live in rented accommodation and have proper rent proofs.
- Salaried employees with HRA claim exemption under Section 10(13A), while those without HRA or self‑employed claim rent deduction under Section 80GG.
- Key documents include rent receipts, rent agreement, landlord PAN (if annual rent > ₹1,00,000), payment proofs, Form 12BB (salaried), and Form 10BA (for 80GG).
- Online HRA calculators save time, avoid manual errors, and instantly show your eligible exemption and potential tax savings.
What is an HRA Calculator?
An HRA calculator is a tool that helps estimate tax-exempt HRA and taxable house rent allowance. Enter details like your basic salary, dearness allowance, monthly rent, and whether you live in a metro or non-metro city.
The calculator then shows your eligible HRA exemption, taxable portion, and potential tax savings. Calculating HRA helps plan tax payments and can be beneficial for knowing your tax-exempt HRA income.
House Rent Allowance (HRA) in India
House Rent Allowance (HRA) is a salary component paid by an employer to an employee and used to pay rent. If you live in a rented house, HRA can reduce your taxable income, provided you have valid rent receipts.
HRA exemptions are different for metro and non-metro cities. If you live in metro cities like Delhi and Mumbai, then 50% of your basic salary and DA are considered part of HRA. However, if you live in non-metro cities, then 40% of your basic salary + DA is considered for exemption.
How to Calculate the HRA Tax Exemption?
Your HRA exemption = the lowest of these three amounts:
- Actual HRA received from the employer in a year.
- Rent paid – 10% of the basic salary + dearness allowance.
- 50% of basic salary + dearness allowance if living in a metro city, and 40% of basic + DA if living in a non-metro city.
Let’s understand this with an example:
- Basic Salary + DA: ₹30,000 per month
- HRA Received: ₹12,000 per month
- Monthly Rent: ₹10,000
- City Type: Non-metro
| Method | Calculation | Result |
|---|---|---|
| Actual HRA received | ₹12,000 × 12 | ₹1,44,000 |
| Rent paid – 10% of (Basic + DA) | ₹1,20,000 – ₹36,000 | ₹84,000 |
| 40% of (Basic + DA) | ₹30,000 × 40% × 12 | ₹1,44,000 |
Lowest amount = ₹84,000. So, you can claim ₹84,000 as tax-exempt under HRA.
Eligibility for a Tax Deduction on House Rent Allowance
Both salaried and self-employed individuals are eligible for house rent allowance. The eligibility criteria for salaried employees are provided under section 10(13A) of the Income Tax Act. Section 80(GG) lists the eligibility criteria for self-employed individuals.
Salaried Employees Should be:
- Receive HRA as a part of their salary,
- Living in a rented home, and
- Submit rent receipts and other proof of rent to the employer.
Self-Employed Individuals Can be Eligible for HRA if They:
- Do not receive HRA from any employer.
- Claim the maximum deductible HRA of ₹5000 per month (₹60000 per year).
- Must submit Form 10BA with rent receipts and rental agreement, and provide landlord PAN if annual rent exceeds ₹1,00,000.
Four Factors that Affect the HRA Calculations
The following four factors include basic salary, HRA from the employer, area of residence, and actual rent paid. For basic salary and related components, check your payslip.
Basic Salary
This forms the foundation of the HRA calculation because the exemption is based on a percentage of basic salary. For example, if the basic salary is ₹30,000 per month, then the annual basic is ₹3,60,000.
HRA Received from Employer
The amount of HRA paid to an employee each month directly impacts the final exemption. For instance, if the HRA received is ₹12,000 per month, then the annual HRA is ₹1,44,000.
City of Residence (Metro vs Non-Metro)
In metro cities, 50% of basic salary + DA is considered when calculating HRA. However, this amount is 40% in non-metro cities. So, in a metro, 50% of ₹3,60,000 = ₹1,80,000. In a non-metro city, 40% = ₹1,44,000.
Actual Rent Paid
The yearly rent, minus 10% of the basic salary, is compared with other factors to determine the exemption. Suppose your monthly rent is 10,000. This makes your annual rent ₹1,20,000. So, Rent paid – 10% of ₹3,60,000 = ₹1,20,000 – ₹36,000 = ₹84,000.
How Much Can Salaried Employees Claim the HRA Amount?
If you are a salaried employee living in a rented home, calculate the HRA exemption by finding the lowest of the following three amounts.
Basic salary = ₹30,000 per month (₹3,60,000 per year). Actual HRA received = ₹15,000 per month (₹1,80,000 per year). Monthly rent = ₹10,000 so annual rent = ₹1,20,000.
In this case:
- Actual HRA received (annual) = ₹1,80,000.
- 50% of basic (metro) or 40% of basic (non-metro)
- 50% of ₹3,60,000 = ₹1,80,000
- 40% of ₹3,60,000 = ₹1,44,000
- Rent paid – 10% of ₹3,60,000 = ₹1,20,000 − ₹36,000 = ₹84,000.
Now, let’s find the lowest of the three amounts:
Lowest of {₹1,80,000, ₹1,80,000, ₹84,000} = ₹84,000. So, you can claim an HRA of ₹84,000.
Section 80 (GG) Self-Employed and those without HRA
Maximum: ₹5,000 per month. ₹60,000 per year. You can claim a deduction under Section 80(GG) if you pay rent for residential accommodation and do not receive HRA. The deductible amount is the least of the following three conditions:
- ₹5000 per month (₹60000 annually).
- 25% of the total income is adjusted as per the income tax rules.
- Rent paid for the year minus 10% of total income.
For example, A is self-employed with a total annual income of ₹3,00,000 and pays rent of ₹6,000 per month (₹72,000 per year). In this case:
- Condition 1 = ₹60,000
- Condition 2 = 25% of ₹3,00,000 = ₹75,000
- Condition 3 = ₹72,000 − (10% of ₹3,00,000) = ₹72,000 − ₹30,000 = ₹42,000.
In this case, the lowest of the three = ₹42,000. A can claim ₹42,000 as a deduction under Section 80(GG) after filing Form 10BA.
Comparison
Section 10(13A) provides an exemption from HRA for salaried employees who receive HRA from their employer. Section 80(GG) provides a rent deduction for those who do not receive HRA, including self-employed individuals and salaried taxpayers without an HRA component.
Key Requirements: Checklist for Claiming HRA
To successfully claim HRA, make sure to have the documents needed, which are:
- Monthly rent receipts signed by the landlord, show property address, month, and amount. They prove the rent was actually paid.
- Rental/lease agreement a formal tenancy contract that establishes you live at the rented address and shows the agreed rent and tenure.
- Landlord’s PAN or declaration is required when the annual rent you pay exceeds ₹1,00,000. This enables the tax authorities to link rental income to the landlord and prevent fictitious claims. If the landlord has no PAN, a signed declaration is accepted in practice.
- Proof of payment bank transfer, cheque, or digital payment records (recommended when rent is paid to relatives or for large amounts). These create an audit trail for verification.
- Form 12BB (salaried employees) employer submission form for HRA and other tax exemptions, used to record the receipts you hand to payroll.
- Form 10BA (for Section 80GG claims) mandatory declaration to be filed by taxpayers claiming 80GG (those not receiving HRA), confirming eligibility and rent details.
- If rent receipts are in cash and exceed statutory limits, revenue stamp rules may apply; ensure receipts follow an acceptable format.
Conditions Required
- Salaried with HRA (Section 10(13A)) HRA exemption applies only if HRA is part of your salary and you actually reside in rented accommodation.
- City factor for exemption: for computing the HRA exemption under Section 10(13A), use 50% of salary if the employee is in a metro (Delhi, Mumbai, Kolkata, Chennai), otherwise 40% of salary.
- Rent paid to relatives/parents, HRA can be claimed if you pay rent and possess proof.
- An HRA or self-employed (Section 80GG), you may claim a deduction under 80GG if you or close family members do not own a house in your place of residence. Also, the deduction should be the least of ₹5,000 per month, 25% of adjusted total income, or rent paid minus 10% of adjusted total income.
Conclusion
Calculating HRA correctly helps you lower your taxable income and legally save more money each year. With the right inputs like basic salary, HRA received, and rent paid, an online HRA calculator instantly shows how much exemption you can claim.
Don’t miss out on the tax benefits you are entitled to; make sure you claim the maximum allowable HRA. Take the next step now and calculate your HRA with the factoHR’s HRA calculator to boost your tax savings.
Frequently Asked Questions
Who is Eligible to Get a House Rent Allowance?
A person working for any employer and self-employed people living in a rental house are eligible for the House Rent Allowance.
Does the HRA Tax Deduction Differ for Armed Forces?
The Income Tax Act governs HRA for salaried and self-employed individuals. At the same time, the armed forces’ HRA is determined by the Ministry of Defence’s guidelines under the Seventh Pay Commission.
What is the House Rent Allowance Calculation Formula?
Under section 10(13A) of the Income Tax Act of India, HRA is calculated as the least of the following three amounts:
- Actual HRA received from the employer.
- Actual rent paid minus 10% of your salary (basic salary + dearness allowance + any relevant commission).
- 50% of your salary if you reside in a metro city (Delhi, Mumbai, Kolkata, or Chennai) or 40% of your salary if you reside in a non-metro city.
Which Documents are Required for Claiming Tax Deductions under Section 80GG?
The following documents are required under section 80(GG) –
- Provide a rental bill or agreement with your name, address, and rent paid.
- If annual rent exceeds Rs 1,00,000, provide the landlord’s PAN.
- Attach documents while filing your tax return.
- Claim HRA deduction accordingly.
Is HRA 50% of the Basic Salary?
HRA can be considered to be 50% of the basic salary + dearness allowance if you reside in a metro city. If you live in a non-metro city, then HRA accounts for 40% of basic salary + DA.
What are HRA and LTA in Salary?
HRA stands for House Rent Allowance, an exemption that helps cover rent. On the other hand, LTA stands for Leave Travel Allowance, which covers domestic and other travel expenses.
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