HRA Calculator

Calculate the taxable HRA amount

All fields are mandatory *

Please enter annual basic salary between 1,20,000/- to 1,80,00,000/-
Please enter annual dearness allowance between 0/- to 5,00,000/-
Please enter annual HRA between 12,000/- to 24,00,000/-
Please enter rent paid per in the year between 12,000/- to 24,00,000/-/span>

Taxable HRA ₹ 

Taxable HRA
 
View more
Rent Paid in excess of 10% of salary ₹  20,000
10% of Basic Salary ₹  20,000
Amount of exempted HRA ₹  20,000
HRA Chargeable to Tax ₹  20,000

Check your eligible home loan amount, if you convert your rent amount into EMI.

What is HRA?

Your salary is a bunch of components and commissions bundled together along with the basic pay-out. House Rent Allowance or HRA, is one such additional component that your employer can pay to you. As the name suggests, HRA is the amount paid to support the rent charges if you live in rented accommodation.

While HRA can surely help you mitigate your rent expenses, it can aid you in enjoying a few tax exemptions as well. Also, the HRA received cannot exceed 50% of your salary.

How is Exemption on HRA calculated?

1) If you are a salaried professional


HRA tax exemption is one of the few ways through which you can save on the taxes paid.

As per the Income Tax Act Section 10-13A, you can claim the least amount out of the following 3 alternatives as part of your HRA tax deduction:
  • The actual amount of rent paid minus 10% of the salary (here salary is a broader term that covers basic salary, dearness allowance (DA) and any commissions), or
  • Actual HRA amount offered by the employer, or
  • 50% of salary when your rented abode is in Mumbai, Delhi, Chennai or Kolkata; or
  • 40% of salary when you live in any other city


2) If you are self-employed/ If you do not receive HRA


If you are self-employed professional or if your salary does not include HRA, then do not need to worry. If you pay rent, then you are still eligible to claim HRA exemption. Section 80 GG of the Income Tax Act, 1961 has provisions for self-employed and salaried employed without HRA component to receive tax exemptions for the charges they need to pay for the rent of the accommodation.

You can claim the least out of the following scenarios here:
  • Rs. 5000 a month as per the HRA exemption rule
  • Actual rent paid minus 10% of the total annual income
  • 25% of the total annual income.


3) If you want to claim deduction on home loan interests


You can be working and living in one city but constructing your own house in another city. In this case, you can pursue both- deduction on home loan interest and claim on HRA exemption. Not only this, but you can also claim a tax deduction on principal repayment of your home loan.

How is HRA Taxed?

The amount of HRA received will be fully taxable just like your basic salary if you live in your own house or you do not pay rent for the place you live in. However, the same is not true for individuals living in a rented space.

Section 10 (13A) of the Income Tax Act, 1961 exempts a part of the HRA from getting taxed if you are an employee paying rent. You can reduce this amount from your income and file the taxes accordingly.
  • Example, Rajesh and Hitesh are employed in the same organisation. Rajesh lives in a rented room and pays monthly rent. On the flip side, Hitesh luckily lives in his own home in the city where he is working. Both receive an HRA of Rs. 10,000 every month. Annually this amount turns out to be a sum total of Rs. 1,20,000.
  • While Rajesh can make deductions from his HRA amount before filing for taxes, Hitesh will have to pay the associated taxes for the entire amount of Rs. 1,20,000. Rajesh can use an

    HRA

    calculator online to know the amount exempted.


Calculation of tax-exempt HRA amount



1) If you are a salaried employee


HRA is usually a fixed component of your salary. But you can negotiate on the amount paid with your employer and come to a mutual agreement.

Your HRA calculated is based on the following parameters:
  • HRA component of the salary
  • Amount of salary
  • The actual amount of rent paid
  • The city where you live in the rented property


2) If you are self-employed/ If you do not receive HRA



If you are claiming HRA exemptions under the Section 80 GG then your exemption is based on the following factors:
  • Your annual income
  • Actual rent paid
  • The monthly exemption bar set by the government

HRA Calculation with Example

For salaried professionals


For example, Mr Gupta, living in Delhi, pays a monthly rent of Rs. 10,000. He monthly receives a basic salary of Rs. 30,000 and HRA of Rs. 14,000. The HRA amount that can be exempted from his income tax is least of the following.
Actual HRA salary Rs. 14,000×12 Rs. 1,68,000
Annual rent paid- 10% of salary Rs. 1,20,000- 36,000 Rs. 84,000
50% salary if the city is a metro else 40% Rs. 3,60,00×0.5
(Since Mr Gupta lived in Mumbai 50% of his salary is taken into account)
Rs. 1,80,000

As comes Rs. 84,000 comes out as the lowest amount, then Mr Gupta can claim Rs. 84,000 as HRA tax exemption. Similarly, you can check your amount of tax exemption on the HRA tax exemption calculator.

For self-employed/not receiving HRA


For example, Mr Singh, living in Mumbai, annually make a sum of Rs. 4,00,000 lakhs. He pays a monthly rent of Rs. 10,000.
Fixed monthly HRA compensation Rs. 5000 ×12 Rs. 60,000
25% of annual income Rs. 4,000×0.25 Rs. 1,00,000
Annual rent paid- 10% of annual income Rs.1,20,000- Rs. 40,000 Rs. 80,000

In this case, Rs. 60,000 is the lowest amount. Therefore, Mr Singh can claim Rs. 60,000 as HRA deduction.

Tax Benefits for HRA

The tax benefits for HRA come in the form of tax deductions that you can claim. This reduces your taxable income. As explained earlier, the amount of tax deduction must be the lowest amount of the following cases:
  • Entire HRA amount provided
  • 50% of your salary if you live in a metro or 40% of the salary if you live someplace else
  • Your actual rent amount after subtracting 10% of your salary

The salary includes the DA as well as other commissions earned. You can use an HRA calculator to know your tax benefits.

How HRA Exemption is Calculated for Special Cases

1.If You Own a House in a Different City


In case you own a house in a different city and work in another city, you can still claim the HRA exemption. You can also claim a tax deduction for making payments towards home loan EMIs. You can claim the HRA exemption as well as a tax deduction by submitting the required documents.

2.If You Share Rent with Spouse


If you share the rent with your spouse, then one person can claim the whole amount as the HRA deduction. However, you and your spouse can claim the HRA exemption separately if you can get separate rent receipts.

3.If You Pay Rent to Family Members


If you reside with your family members and pay rent to them, then also you can claim the HRA exemption. In order to claim the exemption, you must submit the rental agreement, rent receipts, financial transaction proof, etc. But you need to keep in mind that you can’t avail this exemption if the property is owned by you or your spouse.

4.If Your Employer Doesnt Pay You HRA


There are some employers that don’t provide the HRA benefit. However, irrespective of whether your employer provides the HRA benefit, you can claim it if you pay rent. In such a case, you will have to claim this benefit under Section 80GG by filling the form 10BA.

Documents Required to Claim Tax Exemption on HRA

1) Salaried professionals


You need to submit the following while filing Income Tax Returns (ITR) to claim an exemption on HRA:
  • You need to submit at least the last 4 receipts of the rent paid. Make sure that the receipts contain the following details:
    • Landlord/landlady' name
    • Tenant's name
    • Date
    • Address of the rented property
    • Landlord/landlady's PAN Card details
    • A revenue stamp followed by the signature of the landlord/landlady
    • Duration of the stay

    If you do not have the rent receipts, then you can file your lease agreement. This has to be accompanied by the bank statement reflecting that the rent has been paid.
  • You have to submit a copy of PAN of the landlord/landlady along with the PAN Card details of the landlord/landlady, including in case your annual rent paid exceeds 1 lakh. If your landlord/landlady does not possess a PAN Card, then a signed self-declaration by the landlord/landlady would be admissible.

2) Self-employed/ Not receiving HRA


If you are seeking HRA exemption based on Section 80 GG, then you are required to submit form 10-BA where you need to self-declare that you satisfy all the requirements.

Important
The new tax system declared in the Union Budget of 2020 offers the taxpayers liberty to file their ITR as per the old or the new tax scheme. A key point to note here is that the new tax system does not have deductions or exemptions like HRA in the system anymore. So if you plan to file your taxes based on the new scheme, then you won't qualify for the HRA deductions.

HRA Calculator FAQs (Frequently Asked Questions)

Can I Get Tax Rebate if I am Staying in My Own House?

In case you are staying in your own house, you can’t claim the HRA exemption. The entire HRA amount that you receive will be taxable.

My House is Under Construction and I have taken another accommodation on rent in the same city?

If your house is under construction and you have taken a house on rent, then you can claim the HRA exemption.

HRA is not Part of My Salary, But I stayed in a Rented Accommodation. Can I get any Tax Benefits?

If you have taken a house on rent, then you can claim a tax deduction on the rent paid. However, HRA shouldn’t be a part of your salary. For this purpose, you must submit Form 10B.

Can I Claim HRA Tax Exemption When Paying Rent to a Family Member?

In case you are paying rent to your parents, you can claim HRA tax exemption. However, you need to submit documents that provide proof of this transaction.

Can I Get Both HRA Tax Exemption and Tax Rebate on My Home Loan?

You can claim tax exemption on HRA as well as on repayment of a house loan. For example, you have taken a house on rent in a different city, but you are repaying a home loan for a house that you own in another city. In such a case, you can avail tax exemption on HRA for the rent paid. Furthermore, you can avail a tax deduction on home loan repayment.

How to Calculate HRA Tax Exemption?

The tax-exempt part of the house rent allowance is the minimum of the below amounts-

  • Actual HRA received from the employer
  • 50% of the basic salary if the person lives in Delhi, Mumbai, Kolkata, or Chennai, or 40% if the person lives in any other city
  • Excess rent paid annually over 10% of the annual basic salary

Can Anyone Claim Tax Exemption on HRA?

HRA can’t be claimed by everyone. It can only be availed by salaried individuals who pay rent. Also, HRA exemption isn’t applicable for self-employed people.

Can I Claim Tax Exemption on HRA and Deduction on Home Loan Interests at the Same Time?

You can claim tax exemption on HRA and a tax deduction on the home loan interest paid.

DisclaimerThe information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.