Lakshmikumaran & Sridharan Attorneys
Calculator

HRA exemption calculator

Compute House Rent Allowance exempt from income tax under Section 10(13A) of the Income-tax Act, 1961 read with Rule 2A. Applies the minimum-of-three rule for metro and non-metro cities.
Inputs
All amounts are monthly. The total is annualised by the months chosen.

Leave at 0 if DA does not form part of retirement benefits.

Use 12 for the full year; reduce if HRA or rent applied only for part of the year.

Result
Exempt and taxable HRA for the period.
Method and assumptions

The exemption is the least of these three limbs:

  • Actual HRA received
  • Rent paid minus 10% of salary
  • 50% of salary for a metro city, 40% of salary for a non-metro city

Metro rate of 50% applies only to Mumbai, Delhi, Kolkata and Chennai.

Salary for this purpose means basic plus dearness allowance for the number of months claimed.

Exemption is available only under the old tax regime. The new regime under Section 115BAC does not allow HRA exemption.

If the employee owns the residence or does not actually pay rent, no HRA exemption is available.

Rent paid to a spouse is generally not accepted by tax authorities; rent paid to parents must be supported by a genuine tenancy arrangement.

Related: CTC calculator. Back to all tools: labour law calculators.