Taxes
Exempt HRA
The smallest of the allowance, the rent above ten percent of salary, and the statutory percentage of salary.
The Formula
Exempt = min(HRA, rent - 10% x salary, 50%/40% x salary)
The smallest of the allowance, the rent above ten percent of salary, and the statutory percentage of salary.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| H | HRA received | currency | House rent allowance received. |
| R | Rent paid | currency | Rent actually paid. |
| S | Salary | currency | Basic pay plus dearness allowance. |
| c | City factor | rate | 0.5 in a metro, 0.4 elsewhere. |
What Each Symbol Means
Hcurrency
HRA received
House rent allowance received.
Rcurrency
Rent paid
Rent actually paid.
Scurrency
Salary
Basic pay plus dearness allowance.
crate
City factor
0.5 in a metro, 0.4 elsewhere.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate hra exemption page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate HRA Exemption, filed under Finance. Every number the guide produces comes from substituting into this one line.