HRA Exemption Calculator

What is HRA exemption?

HRA (House Rent Allowance) is part of your salary that some employers pay to cover rent. A portion of it can be exempt from tax if you actually pay rent for a place you live in. The exempt amount is the minimum of three limits: (1) actual HRA received, (2) 50% of basic salary (metro cities: Delhi, Mumbai, Chennai, Kolkata) or 40% (non-metro), (3) rent paid minus 10% of basic salary. Whatever is the lowest of these three is your tax-free HRA; the rest is added to your taxable income.

You need to submit rent receipts (and in some cases your landlord’s PAN if rent is high) to your employer to claim the exemption. This calculator helps you see how much is exempt and how much is taxable so you can plan your taxes and ensure you claim correctly. For official assessment, refer to the Income Tax Department and a CA.

The three limits

Limit 1: Actual HRA received from your employer. Limit 2: 50% of basic salary if you live in a metro city (Delhi, Mumbai, Chennai, Kolkata), or 40% of basic for non-metro. Limit 3: Rent paid minus 10% of basic salary. The lowest of these three is your exempt HRA; the rest is taxable. So even if you receive a large HRA, the exemption is capped by the other two limits. Use the calculator to see which limit applies in your case.

Example: Basic ₹50k, HRA ₹20k, Rent ₹18k, Metro

Basic = ₹50,000, HRA received = ₹20,000, rent paid = ₹18,000, metro. Limit 1 (actual HRA) = ₹20,000. Limit 2 (50% of basic for metro) = ₹25,000. Limit 3 (rent − 10% of basic) = ₹18,000 − ₹5,000 = ₹13,000. The minimum is ₹13,000, so exempt HRA = ₹13,000 per month and taxable HRA = ₹7,000 per month. Over the year, you save tax on ₹1,56,000 of HRA. Use the calculator above with your basic, HRA, rent, and metro/non-metro to get your figures. Keep rent receipts and declare to your employer to claim the exemption.

Benefits of Using This Calculator

An HRA exemption calculator shows how much of your house rent allowance is tax-free under the three limits (actual HRA, 50%/40% of basic, rent minus 10% of basic), so you can plan your taxes and ensure you claim the correct amount. It helps salaried employees and their employers verify exemption and taxable HRA before filing or processing payroll.

Use it when you get a new job, when your rent or basic changes, or at the start of the financial year to estimate your tax. If you are not claiming HRA (e.g. living in your own house), you do not get this exemption—so if you pay rent, make sure you have the documents and declaration in place.

How to Use This Calculator

Enter your basic salary, HRA received, rent paid, and whether you live in a metro city (50% of basic) or non-metro (40%). The calculator applies the three limits and shows exempt HRA and taxable HRA per month. You need rent receipts (and in some cases your landlord’s PAN for high rent) to claim the exemption with your employer.

For official assessment and filing, refer to the Income Tax Department and a CA. Use the result to plan your tax and to ensure your employer has the right figures so that TDS is calculated correctly.

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