HRA Calculator

HRA is a component of your salary provided by your employer to cover rental expenses. Under the old tax regime, a portion of HRA is tax-exempt if you live in rented accommodation. Under the new tax regime, HRA exemption is not available.

HRA exemption = Minimum of: (1) Actual HRA received from employer. (2) Rent paid − 10% of basic salary. (3) 50% of basic salary (metro cities: Delhi, Mumbai, Kolkata, Chennai) or 40% of basic salary (non-metro). The lowest of these three amounts is exempt from tax.

Only 4 cities are classified as metro for HRA tax exemption: Delhi, Mumbai, Kolkata, and Chennai. Residents in these cities can claim 50% of basic salary as HRA exemption. All other cities (Bangalore, Hyderabad, Pune, Ahmedabad, etc.) are non-metro and qualify for only 40% of basic salary.

Yes, you can pay rent to parents and claim HRA exemption — it is legal. However: you must actually transfer the rent amount to parents' bank account. Parents must declare it as rental income in their ITR. If parents are in a lower tax slab, this is a common tax planning strategy. You cannot claim HRA for rent paid to a spouse.

You need rent receipts (monthly) with the landlord's signature. If annual rent exceeds ₹1 lakh, you also need the landlord's PAN. Some employers also require a rent agreement. These are submitted to your HR during investment declaration (typically in January–February) or at year-end.

Yes. If you own a house (for which you claim home loan deduction) but work in a different city and rent there, you can claim both: HRA exemption for the rented house + home loan interest deduction (Section 24) and principal repayment (Section 80C) for your owned house. This dual benefit is fully legal.

If HRA is not part of your salary structure, you can claim deduction under Section 80GG instead. Section 80GG allows a deduction of the minimum of: ₹5,000/month (₹60,000/year), 25% of total income, or rent paid minus 10% of income. Unlike HRA, 80GG is available to self-employed as well.

Yes. Under the new tax regime (FY 2024-25), HRA exemption is not available. The entire HRA received is added to taxable income. However, the new regime has lower tax slab rates and higher standard deduction (₹75,000). For people who don't pay rent or pay very low rent, the new regime may still be beneficial.

Typically, HRA is set at 40–50% of basic salary. For metro employees, maximising HRA (50% of basic) is beneficial since the exemption limit is also 50% of basic. The actual exempt amount also depends on rent paid. There's no benefit in having HRA higher than what you can actually claim as exempt.

At 30% tax bracket: ₹1 lakh HRA exemption saves ₹30,000 in tax. At 20%: saves ₹20,000. At 10%: saves ₹10,000. This makes HRA a significant tax-saving tool for higher income earners in the old regime, especially in metro cities with high rents.