HRA Exemption Calculator
Free HRA exemption calculator. Enter basic salary, HRA received and rent paid to calculate your tax-exempt HRA under the old tax regime — metro and non-metro.
About the HRA Exemption Calculator
An HRA exemption calculator finds the tax-exempt part of your House Rent Allowance under the old regime as the lowest of actual HRA, rent paid minus 10% of basic, and 50% (metro) or 40% (non-metro) of basic, and shows the exempt and taxable HRA.
HRA exemption is the smallest of three separate figures, not simply "HRA received is tax-free" — and most people have never seen all three laid out side by side to understand which one actually binds. It's one of the largest tax breaks available to salaried tenants under the old tax regime, and also one of the most confusing.
The three figures: the actual HRA your employer pays you, your annual rent minus 10% of your basic salary (rent below that 10% threshold gives zero exemption — the law assumes you'd pay some rent regardless of any allowance), and 50% of basic salary if you live in a metro (Delhi, Mumbai, Kolkata, Chennai) or 40% elsewhere. Whichever of the three is smallest is what you can claim exempt; the rest of your HRA becomes taxable income. This calculator computes and displays all three so you see exactly which constraint is binding for you.
Two situations trip people up. If you own your home (or live with parents rent-free) and don't pay rent, you can't claim any HRA exemption regardless of the allowance in your salary structure. And this exemption only applies under the old tax regime — the new regime (now the default) offers no HRA exemption at all, so factor that into your regime choice with the income tax calculator. Keep rent receipts and, for annual rent above ₹1 lakh, your landlord's PAN — your employer will ask for both to process the exemption.
Frequently asked questions
- Why is my rent minus 10% of basic sometimes zero?
- The law only exempts rent paid above 10% of your basic salary, on the reasoning that some baseline rent would be paid regardless of any allowance. If your rent doesn't clear that 10% threshold, this component of the exemption is zero.
- Does HRA exemption apply under the new tax regime?
- No — the new regime (the current default) doesn't allow HRA exemption at all. This calculation only matters if you've opted for the old regime. Compare both regimes with the income tax calculator before deciding.
- What documents do I need to claim HRA exemption?
- Rent receipts for the claimed period, and your landlord's PAN if annual rent exceeds ₹1 lakh. Submit these to your employer for payroll processing, or claim directly while filing your return if not processed through payroll.
- Can I claim HRA if I live in my own house?
- No — HRA exemption requires you to actually pay rent for accommodation you occupy. Homeowners cannot claim this exemption, though they may claim home loan interest deductions instead.
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