India HRA Calculator
Calculate your HRA exemption under the old tax regime. Enter basic salary, HRA received and rent paid to find out your tax-exempt and taxable HRA amount.
HRA Details
HRA Exemption Calculation
Condition 1: Actual HRA Received
₹2,40,000
Condition 2: 50% of Basic Salary
₹3,00,000
Condition 3: Rent Paid - 10% of Basic
₹2,40,000 - ₹60,000
₹1,80,000
HRA Exemption (Minimum of 3 conditions)
₹1,80,000
Applies: Rent Paid - 10% of Basic Salary
Taxable HRA Amount
₹60,000
This portion is included in taxable income
Approximate Tax Saving (at 30% slab)
₹54,000
Actual saving depends on your tax slab
How HRA Exemption Works
The exemption is the minimum of these three amounts:
- Actual HRA received from your employer
- 50% of your basic salary (metro or non-metro rates)
- Rent paid minus 10% of basic salary
Important Notes
- HRA exemption requires rent receipts or proof if demanded by income tax department
- Self-owned property: You may not be eligible for HRA exemption if you receive HRA
- This is applicable only under old tax regime; new regime has no HRA exemption
Disclaimer
This calculator is for informational purposes. Actual HRA exemption depends on your specific circumstances and supporting documentation. Consult a tax professional for guidance on your situation.
How HRA Exemption Is Calculated
House Rent Allowance (HRA) is partially tax-exempt under Section 10(13A). The exemption is the LEAST of three numbers: (1) actual HRA received, (2) 50% of basic salary if you live in metro (Mumbai, Delhi, Chennai, Kolkata) or 40% non-metro, (3) rent paid minus 10% of basic salary. Whichever is smallest is the exempt amount; the remainder is taxable.
Worked example: ₹50,000 monthly basic salary, ₹20,000 monthly HRA, ₹15,000 rent paid, Mumbai resident. (1) HRA received: ₹20,000. (2) 50% of basic: ₹25,000. (3) Rent minus 10% basic: ₹15,000 - ₹5,000 = ₹10,000. Smallest is ₹10,000 - that's the exempt amount. The remaining ₹10,000 of HRA is taxable.
Documentation Required
Submit rent receipts to your employer for HRA exemption to be applied in TDS calculations. For rent above ₹1 lakh/year (₹8,333/month), you must provide the landlord's PAN. Without landlord's PAN, no HRA exemption is allowed by the employer (you can still claim at filing if you have valid documentation).
If you pay rent to parents (a popular tax-saving structure), all standard documentation requirements apply - rent agreement, payment records (preferably bank transfer, not cash), parent reporting the income on their return. The arrangement must be genuine, not just paperwork. Tax officers look for genuine rent flow, market-rate amounts, and actual occupancy.
HRA Only Available in Old Regime
Critical: HRA exemption is only available under the OLD regime. New regime allows no HRA exemption. So choosing between regimes for HRA-heavy salary structures heavily favours old regime. A salary of ₹15 lakh with ₹6 lakh HRA and ₹3.6 lakh rent paid might save ₹50,000+/year by staying old regime.
If you don't actually pay rent (live with parents without rent flow, or own your home), HRA exemption isn't claimable - the third condition (rent minus 10% basic) becomes negative and exemption is zero. Many employees receive HRA but don't realise the exemption is conditional on actual rent payment with proper documentation.
Self-Owned Property and Section 24
If you live in your own home (no rent paid), no HRA exemption applies. Instead, claim deduction under Section 24 for home loan interest (up to ₹2 lakh under old regime, ₹0 under new regime). Section 80C also allows principal repayment up to ₹1.5 lakh.
Combined home loan deductions in old regime (₹2L interest + portion of ₹1.5L principal under 80C + stamp duty/registration in year of purchase up to 80C limit) can exceed total HRA exemption for many salary structures. Renting vs buying calculations should include these tax differences. The [India Home Loan EMI Calculator](/india-home-loan-emi-calculator) handles the principal/interest split.
Frequently Asked Questions
Can I claim HRA and home loan interest together?
Yes, in some specific circumstances - if you own a home in one city but work in another and rent there for work. Both HRA and home loan interest deduction apply. Many tax officers scrutinise this combination - keep evidence of work location, rental in work city, and ownership in different city.
What if I switch jobs mid-year?
Each employer can grant HRA exemption based on the salary structure with them. Provide rent receipts and landlord PAN to each employer. At filing, total HRA exemption is consolidated. Sometimes employers under-grant exemption resulting in higher TDS - this comes back as refund at filing.
Can I pay rent in cash?
Above ₹1 lakh/year (₹8,333/month), tax officers strongly prefer bank transfers. Cash payments above this threshold raise audit risk and may be disallowed without strong evidence (rent agreement, landlord acknowledgment, banking trail to landlord). Best practice: always pay via bank transfer with rent agreement in place.
What if my rent equals my HRA?
Doesn't automatically mean full exemption - the 50%/40% basic salary cap and 'rent minus 10% basic' formula still apply. Many people incorrectly assume rent equal to HRA means tax-free; the actual exemption is usually less due to the third condition. Run the calculation each year.
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