House Rent Allowance Tax Exemption Calculator | Section 10(13A)
ā Tax Exemption - Reduce taxable income under Section 10(13A)
ā Metro: 50% | Non-Metro: 40% - Based on city category
ā Save Taxes - Average savings ā¹15,000 - ā¹50,000 per year
ā Easy to Claim - Submit rent receipts to employer
ā 50% of Basic+DA exemption limit for metro cities
Rent Receipt Required: Annual rent > ā¹1L needs proper receipts
Exempted HRA = Minimum of the following three:
Result: Minimum = ā¹1.20 L (Yearly) or ā¹10,000 (Monthly)
House Rent Allowance (HRA) is a salary component provided by employers to help employees meet rental accommodation expenses. It qualifies for tax exemption under Section 10(13A) of the Income Tax Act, helping you save significant taxes.
Our calculator determines the exact tax-exempt portion based on your salary, rent paid, and city type (metro 50% or non-metro 40%). Calculate in monthly or yearly mode, compare metro vs non-metro savings, and know document requirements instantly.
A. Actual HRA received from employer
B. 50% of salary (Basic + DA) for Metro cities OR 40% for Non-Metro cities
C. Actual rent paid minus 10% of salary (Basic + DA)
Given:
ā¢ Basic Salary: ā¹50,000/month
ā¢ HRA Received: ā¹20,000/month
ā¢ Rent Paid: ā¹15,000/month
ā¢ City: Metro (Delhi)
Calculation:
A = ā¹20,000
B = 50% of ā¹50,000 = ā¹25,000
C = ā¹15,000 - (10% of ā¹50,000) = ā¹10,000
Exempt HRA = Min(A,B,C) = ā¹10,000
Taxable HRA = ā¹20,000 - ā¹10,000 = ā¹10,000
Given:
ā¢ Basic Salary: ā¹50,000/month
ā¢ HRA Received: ā¹20,000/month
ā¢ Rent Paid: ā¹15,000/month
ā¢ City: Non-Metro (Bangalore)
Calculation:
A = ā¹20,000
B = 40% of ā¹50,000 = ā¹20,000
C = ā¹15,000 - (10% of ā¹50,000) = ā¹10,000
Exempt HRA = Min(A,B,C) = ā¹10,000
Taxable HRA = ā¹20,000 - ā¹10,000 = ā¹10,000
Benefit: Higher exemption limit of 50% of Basic+DA
Limit: 40% of Basic+DA as exemption ceiling
Annual Rent ā¤ ā¹1 Lakh:
Annual Rent > ā¹1 Lakh:
Own house in City A, Renting in City B:
ā Eligible for HRA in City B
House in City A treated as "Deemed Let Out"
Shared Accommodation:
ā Can claim HRA for your share
Each person can claim their rent portion
Living with Parents:
ā Eligible if paying actual rent
Parents must show as rental income
House Rent Allowance (HRA) is a component of salary paid by employers to employees for renting accommodation. HRA exemption is calculated as the MINIMUM of three values: (1) Actual HRA received from employer, (2) 50% of salary (Basic+DA) for metro cities OR 40% for non-metro cities, (3) Actual rent paid minus 10% of salary (Basic+DA). For example: Basic ā¹50K, HRA ā¹20K, Rent ā¹15K (metro): Exempt HRA = Min(ā¹20K, ā¹25K, ā¹10K) = ā¹10K. Balance ā¹10K is taxable. Metro cities: Delhi, Mumbai, Kolkata, Chennai. All others are non-metro.
HRA exemption eligibility: (1) You must be a salaried employee receiving HRA component in salary, (2) You must be living in a rented house (not own house), (3) You must actually pay rent - no exemption for zero rent, (4) Self-employed/business owners cannot claim HRA (but can claim house rent as business expense), (5) If you live in your own house, HRA is fully taxable, (6) If your employer does not provide HRA component, you cannot claim this exemption (but can claim deduction under Section 80GG if conditions met). No minimum or maximum limit on rent amount, but rent receipts required if annual rent > ā¹1 lakh.
Metro vs Non-Metro HRA difference: Metro Cities (50% of Basic+DA): Delhi, Mumbai (Greater Mumbai), Kolkata, Chennai. These 4 cities get 50% of salary as HRA exemption limit. Non-Metro Cities (40% of Basic+DA): All other cities in India including Bangalore, Hyderabad, Pune, Ahmedabad, Gurgaon, Noida. Example: For ā¹50K basic salary - Metro limit = ā¹25K/month (ā¹3L/year), Non-Metro limit = ā¹20K/month (ā¹2.4L/year). This 10% difference can save ā¹30,000-ā¹50,000 in annual taxes. City classification is based on tax law definition, not population or development status.
Rent receipt requirements: Annual rent ā¤ ā¹1 lakh (ā¹8,333/month): Only self-declaration to employer needed, no rent receipts required, no landlord PAN needed. Simple format: tenant name, landlord name & address, rent amount, period. Annual rent > ā¹1 lakh (>ā¹8,333/month): Mandatory rent receipts (monthly/quarterly), Landlord PAN card number required, Rental agreement copy, Bank transfer proof recommended, Revenue stamp if receipt > ā¹5,000. Additional for rent > ā¹50K/month: TDS @ 5% on rent must be deducted, Form 16 to be issued to landlord, TDS challan & return filing. Keep all documents for 6 years for IT department audit.
Living with parents: YES, you can claim HRA even if living with parents if: (1) You pay actual rent to parents, (2) Rental agreement is made with parents, (3) Parents declare this rent as house property income in their IT returns, (4) Rent is paid via bank transfer (maintain proof), (5) Rent amount should be reasonable for area/house size. Cannot claim if: Living rent-free with parents, House is owned by you or your spouse, Rent paid to spouse (not allowed as per IT rules), House is owned jointly by you and parents. Thumb rule: Transaction should be genuine, at market rate, and properly documented. Many employees claim ā¹5K-10K rent to parents legitimately and save ā¹30K-50K annual tax.
Own house HRA claim: If you own a house in City A but work in City B and pay rent: You CAN claim HRA exemption for rent paid in City B, Your own house in City A will be treated as "Deemed Let Out Property", You will pay tax on notional rent of City A house minus deductions (interest, municipal taxes), Condition: Both houses must be in DIFFERENT cities, If both in same city, HRA not allowed - entire HRA taxable, Net effect: Often still beneficial as HRA exemption > notional rent tax. Example: Own house in hometown, work in metro - fully eligible for HRA. Must maintain rent receipts and declaration that you own property elsewhere.