HRA Exemption Calculator.

Under Section 10(13A) and Rule 2A, the exempt portion of HRA is the least of three amounts: the HRA actually received for the period; the rent paid for the period minus 10 percent of salary; and 50 percent of salary if the rented house is in Delhi, Mumbai, Kolkata or Chennai, or 40 percent of salary in any other city. Salary here means basic pay plus dearness allowance if the terms of employment count it for retirement benefits, plus commission fixed as a percentage of turnover. Whatever part of the HRA is not exempt is taxed as salary. The calculation is done for the period the conditions hold, so a change in rent, city or salary mid-year means computing each period separately and adding the results.

No. The new regime under Section 115BAC, which is the default from FY 2023-24 onwards, does away with most exemptions and deductions, including the HRA exemption under Section 10(13A), Section 80C, Section 80D and the deduction for home loan interest on a self-occupied house. In exchange it offers lower slab rates and, from FY 2025-26, no tax on income up to Rs 12 lakh after the Section 87A rebate, plus a standard deduction of Rs 75,000 for salaried taxpayers. Whether the old regime with HRA still works out better depends on your rent, your 80C investments and your income level. Run this calculator, then compare the two regimes with the income tax calculator on this site.

Only four: Delhi, Mumbai, Kolkata and Chennai. The list comes from Rule 2A and has not been updated even though Bengaluru, Hyderabad, Pune, Ahmedabad and Gurugram have grown into large expensive cities. For every city other than the four, including all of those, the limit is 40 percent of salary. Note that the rule refers to the city where the rented accommodation is situated, not where the employer office is, so an employee living in a rented flat in Noida or Gurugram while working in Delhi uses 40 percent, whereas one renting inside Delhi uses 50 percent.

Rent paid to parents is accepted as long as the arrangement is genuine: the house belongs to the parent, you actually pay the rent, preferably by bank transfer, you hold rent receipts, and the parent shows the rent as income in their own return. Tax tribunals have allowed such claims repeatedly when the money trail exists, and disallowed them when it did not. Rent paid to a spouse is treated with more suspicion because spouses are generally seen as one household, and while there are isolated rulings allowing it, most employers will not accept it in proofs. If you do pay rent to a parent, get a simple rent agreement, use the rent receipt generator on this site each month and keep the bank records.

Under Rule 26C the employee gives Form 12BB to the employer with the rent details, the landlord name and address, and the landlord PAN if the total rent for the year exceeds Rs 1,00,000. Employers usually ask for rent receipts for each month or quarter, and many ask for a copy of the rent agreement as well. If the landlord does not have a PAN, a signed declaration from the landlord to that effect is required. Employees who miss the proof deadline can still claim the exemption in their income tax return, as long as they are in the old regime and hold the evidence, but the TDS during the year will have been deducted without the benefit.

Then Section 10(13A) does not apply, because there is no HRA to exempt. Employees and self-employed people who pay rent without receiving HRA can look at Section 80GG instead, which allows a deduction equal to the least of Rs 5,000 per month, 25 percent of total income, or rent paid minus 10 percent of total income, provided neither they nor their spouse or minor child own a house in the city where they live and work. Section 80GG needs Form 10BA to be filed and, like the HRA exemption, is available only under the old regime.

Only when the terms of employment provide that DA counts for retirement benefits such as provident fund or gratuity, which is typical of government and public sector pay structures. In most private companies there is no DA at all, and the salary for the HRA rule is simply the basic pay. If you are unsure, check your appointment letter or ask HR; a wrong assumption changes both the 10 percent deduction from rent and the 40 or 50 percent limit. Fixed commission calculated as a percentage of turnover also forms part of salary for this rule, though it is rare in ordinary salaried jobs.

No. The figures are used only inside your browser to compute the three limits and the exempt amount, and nothing is stored or transmitted. There is no login and no history, so you can enter real salary and rent numbers freely and re-run the calculation as many times as you like. If you want to keep the result, note it down or take a screenshot before you change the inputs.