. HRA Exemption Calculator

Calculate House Rent Allowance (HRA) Exemption

Please enter a valid amount
Please enter a valid amount
Monthly Exemption Rs.
40% (or 50% in case of metro) of basic salary
Rs.

House Rent Allowance Actually Received
Rs.
Rs.

Excess of rent paid over 10% of basic salary
Rs.

Disclaimer: H&R Block has developed the Tax Calculator as a tool to provide the user with information about their overall, annual tax liability. The Tax Calculator is a tax estimator tool only and should only be used to calculate an individual’s estimated total tax liability. The Tax Calculator is not intended to serve as an online tax preparation tool for Income Tax Returns, or any other return; any other use is strictly prohibited. In the event the user intends to procure H&R Block’s tax filing services or any other services, they could obtain the same by accepting the applicable terms and conditions. H&R Block and its officers, employees or representatives disclaim any and all representations, warranties or guarantees and assume no responsibility or liability for any damages arising out of the use of, reference to or reliance on the Tax Calculator.

Let’s understand the calculation of HRA with the help of an example.

HRA Exemption Calculation with Example

Example: Suppose Mr Pankaj lives in Mumbai and earns a basic salary of Rs. 40,000 per month. The HRA component of his salary is Rs. 20,000 but the actual rent paid by him is Rs. 12,000. How much exemption can he get?

Solution: To solve this problem, first let us look at the factors affecting HRA calculation.

Actual HRA received is (Rs. 20,000 x 12) = Rs. 2,40,000

Actual rent paid (Rs. 12,000 x 12) – 10% of salary [(Rs. 40,000 x 12) x 10%] = Rs. 96,000

50% of basic salary [(Rs. 40,000 x 12) x 50%] = Rs. 2,40,000

Rs. 96,000 is the least among the above obtained figures so Mr Pankaj can get Rs. 96,000 exempt.

Example: I stay in a rented apartment in Hyderabad, and my basic salary is Rs. 20,000. The total rent that I pay is Rs. 7,000 and my actual HRA is Rs. 10,000. How much tax can be exempted from this?

Solution: Since you live in a non-metro city, you will be allowed 40% of basic salary as HRA. To solve this problem, first, let us look at the factors affecting HRA calculation.

Actual HRA received is (Rs. 10,000 x 12) = Rs. 1,20,000

Actual rent paid (Rs. 7,000 x 12) – 10% of salary [(Rs. 20,000 x 12) x 10%] = Rs. 60,000

You will receive 40% of basic salary [(Rs. 20,000 x 12) x 40%] = Rs. 96,000

Rs. 60,000 is the least among the above obtained figures so you can get Rs. 60,000 exempt.

Frequently Asked Questions:

I’m staying in Pune city on a rental basis, but I have a flat in Talegaon, which I have given on rent. Since the flat that I own comes under Talegaon Grampanchayat (possession taken), these two places are considered to be two different cities. Can I claim exemption on interest on house property as well as on HRA?

Yes, you can claim both benefits.

I’ve received last year’s salary arrears. Can I include these arrears while claiming my HRA exemptions?

Salary of the relevant period, for which the exemption is calculated, is to be taken for calculating HRA exemption. That is, salary on due basis is to be taken and not the arrears, for HRA purposes.

I pay rent for my family staying in Delhi as well as for the apartment that I have rented for accommodation in Hyderabad, where I work. Can I claim HRA exemption for the rent that I pay for both accommodations.

No. As per Rule 2A, rent paid should only be considered for one house in which the assessee resides and pays rent for. Therefore, you will only be able to claim the rent for the house that you are residing, not on the house accommodated by your family.