HRA Exemption Calculator

Calculating your exact HRA exemption takes less than a minute:

1. Enter your monthly basic salary as per your salary slip.
2. Enter the monthly HRA received from your employer.
3. Enter the actual monthly rent paid for your accommodation.
4. Select your city type — metro (Delhi, Mumbai, Chennai, Kolkata) or non-metro.
5. Click Calculate to instantly see your monthly and annual HRA exemption, taxable HRA, and net tax saving.

The calculator automatically applies all three Section 10(13A) conditions and picks the minimum value as your exempt HRA amount.

Under Section 10(13A) of the Income Tax Act, salaried employees living in rented accommodation can claim a portion of their HRA as exempt from income tax. This exemption reduces your taxable income, directly lowering your tax liability for the financial year.

The exemption is not a flat amount — it is calculated based on three specific conditions, and the lowest of the three becomes your actual exemption. This means your exemption depends on multiple factors including your basic salary, the HRA your employer provides, your actual rent paid, and the city you live in.

The HRA exemption is the minimum of these three amounts:

• Condition 1: Actual HRA received — The total HRA component paid by your employer as part of your monthly salary.
• Condition 2: 50%/40% of basic salary — 50% of your monthly basic salary if you live in a metro city (Delhi, Mumbai, Chennai, Kolkata), or 40% if you live in a non-metro city.
• Condition 3: Rent paid minus 10% of basic salary — The amount by which your actual monthly rent exceeds 10% of your monthly basic salary.

HRA Exemption = Minimum of (Condition 1, Condition 2, Condition 3)

Any amount of HRA received above this minimum is added back to your taxable income and taxed at your applicable slab rate.

Let's work through a detailed example for a salaried employee in Bangalore (non-metro):

• Monthly Basic Salary = ₹40,000
• Monthly HRA Received = ₹20,000
• Monthly Rent Paid = ₹18,000
• City = Non-metro

Condition 1: Actual HRA received = ₹20,000

Condition 2: 40% of ₹40,000 = ₹16,000

Condition 3: ₹18,000 − (10% of ₹40,000) = ₹18,000 − ₹4,000 = ₹14,000

HRA Exemption = ₹14,000 per month (minimum of the three conditions)

Annual HRA exemption = ₹14,000 × 12 = ₹1,68,000, reducing taxable income by this amount.

Here are practical ways to maximize the HRA tax benefit:

1. Pay rent above 10% of basic salary — Condition 3 becomes zero if your rent is below 10% of basic salary, eliminating any exemption regardless of other conditions.
2. Negotiate a higher HRA component — Ask your HR to structure your salary with a higher HRA component, since the exemption is capped at the HRA received (Condition 1).
3. Maintain proper rent receipts — Keep monthly rent receipts and your rental agreement as documentation for your employer and income tax records.
4. Provide landlord PAN for high rent — If annual rent exceeds ₹1,00,000, submit your landlord's PAN to your employer to ensure the exemption is processed correctly.

Our calculator helps you accurately plan your HRA tax saving by allowing you to:

• Get instant, accurate HRA exemption calculations applying all three conditions automatically
• See exactly how much of your HRA is tax-exempt and how much is taxable
• Try different rent amounts to find the optimal rent level for maximum exemption
• Understand your annual tax saving from the HRA exemption clearly