House Rent Allowance (HRA) is one of the most powerful tax-saving components in an Indian salary structure. However, calculating the exact amount you can legally exempt from income tax requires a strict 3-step formula. Our HRA Exemption Calculator automates this Section 10(13A) math instantly.
How to calculate HRA Exemption?
1. Select City Type: If you live in Delhi, Mumbai, Kolkata, or Chennai, select "Metro". For Bengaluru, Hyderabad, Pune, Gurgaon, and all other cities, you MUST legally select "Non-Metro".
2. Basic Salary: Input your total annual Basic Salary (including Dearness Allowance). Do not enter your entire CTC.
3. HRA & Rent: Input the exact HRA you received from your employer, and the absolute total actual rent you transferred to your landlord during the financial year.
The Section 10(13A) Rule
According to the Income Tax Department, the HRA exemption is strictly the lowest (least) of the following three amounts:
- Rule 1: The actual HRA received from your employer.
- Rule 2: 50% of your Basic Salary (if living in a Metro city) OR 40% of your Basic Salary (if Non-Metro).
- Rule 3: The Excess Rent paid. Specifically: `Actual Rent Paid - (10% of Basic Salary)`.
The lowest number among these three acts as your "Exempted HRA". It is subtracted from your total salary, making it completely tax-free under the Old Regime.
Frequently Asked Questions
No! Despite being the tech capital, the Income Tax Department strictly limits Metro status to only 4 cities: Delhi, Mumbai, Kolkata, and Chennai. Bengaluru, Hyderabad, and Pune employees must use the 40% Non-Metro calculation limit.
Yes, absolutely. The IT Appellate Tribunal has clarified that paying rent to parents is completely valid, as long as you actually transfer the money via bank channels and your parents declare that rental income in their personal ITR.
Under the New Tax Regime (Section 115BAC), HRA exemption is 100% abolished. The entire HRA you receive is added directly to your taxable income and taxed according to your slab.
Yes. If your annual rent payment exceeds ₹1,00,000 (approx. ₹8,333/month), it is mandatory to submit your landlord's PAN card to your employer. Without it, the employer will reject your HRA claim and deduct steep TDS.
Yes, you can claim both simultaneously. If you bought a house on a loan but live in a rented apartment in a different city for employment purposes, you can claim Section 24(b) for the home loan interest AND Section 10(13A) for HRA rent.