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Exemption Tool

House Rent Calculator

Instantly calculate your House Rent Allowance (HRA) exemption online for free. Save taxes and optimize your salary based on rent paid, city, and income.

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What is HRA?

House Rent Allowance explained

HRA stands for House Rent Allowance. That portion of an employee's salary provided by the employer to pay for rental expenses. It is mainly paid to a salaried individual dwelling in rented accommodation.

The HRA component provides a benefit under section 10(13A) of the Income Tax Act, 1961, as per the rules specified by the tax department. The exact amount of exemption may vary based on the employee's salary, HRA received, actual rent paid, and the location where he stays.

A salaried person qualifies for tax relief on HRA if certain specified conditions are satisfied, for instance, a rent payment and living in rented accommodation. The HRA exemption would, therefore, help to lessen taxable income and consequently form an important source of tax relief.

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Make the most of your HRA benefits.

How is HRA Calculated for Tax Saving?

The HRA exemption for tax purposes is calculated using the minimum of the following three values:

1

Actual HRA received from the employer.

2

50% of salary (basic + dearness allowance) if residing in metro cities, or 40% if residing in non-metro cities.

3

Actual rent paid minus 10% of salary (basic + dearness allowance).

Important to Know

The minimum amount of the three above is the HRA exemption. As it reduces taxable income, it saves the taxes of workers. Workers have to be able to provide evidence of paid rent in order to be eligible for the benefit of HRA.

For example: If your monthly rent is higher than 10% of your basic salary, and your employer provides HRA as part of your salary, you can claim the tax benefit on the rent paid, within the limits mentioned above.

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How SSCO HRA Calculator Works

The SSCO HRA Calculator helps you calculate the portion of your House Rent Allowance (HRA) that is exempt from tax based on your salary, rent, and city of residence.

Here's how it works:

  • Basic Salary: Enter your monthly basic salary, excluding other allowances.

  • HRA Received: Input the monthly HRA amount provided by your employer.

  • Rent Paid: Enter the actual rent amount you pay for your accommodation each month.

  • City Type: Choose between a metro city (like Delhi, Mumbai, Kolkata, or Chennai) or a non-metro city.

Example Calculation:
Basic Salary:
₹30,000
Rent Paid:
₹12,000
HRA Received:
₹14,000
City Type:
Metro

The calculation compares:

  • Actual HRA received: ₹14,000
  • Rent paid – 10% of Basic Salary (₹12,000 - ₹3,000): ₹9,000
  • 50% of Basic Salary for Metro: ₹15,000
Exempted HRA (Minimum value): ₹9,000

Frequently Asked Questions

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Yes, that is possible if one claims HRA and pays rent to parents. But it should be paid by the proper banking channel and would be reported as income in the hands of the parents. It is very much advisable to keep a proper record in the forms of rent agreement and rent receipts as proof.

If you forgot to submit the rent receipts to your employer, you may still be able to claim the exemption under HRA while filing returns. All you would need to do is attach the rent receipts with all other documents at the time of submitting your returns and would have handled the issue of the deduction.

Now, if the landlord is not ready to divulge his PAN and your rent is above ₹1,00,000, you would mention that in your return. In any such case, it will be wise to hold on to other proofs of rent payments, like bank transfers, to cover your claim on HRA during the return process.