How to use the HRA exemption calculator
- Enter your basic salary per month.
- Enter any dearness allowance — add it to basic for the calculation.
- Enter the HRA received per month.
- Enter the rent paid per month.
- Choose your city type — metro cities use a higher limit.
- Read the exempt and taxable HRA, monthly and annually.
Worked example
Basic salary ₹50,000, no DA, HRA received ₹20,000, rent paid ₹15,000 in a metro city. Ten per cent of salary is ₹5,000, so rent excess is ₹10,000. The metro limit is 50% of salary = ₹25,000. HRA received is ₹20,000. The exemption is the lowest of the three = ₹10,000, leaving ₹10,000 taxable each month.
The three limits
exempt = min( HRA received, rent paid - 10% of (basic + DA), 50%/40% of (basic + DA) )
The 50% figure applies in metro cities (Delhi, Mumbai, Chennai, Kolkata); the 40% figure applies elsewhere. The exemption is taken monthly and then multiplied by 12 for the annual figure. The balance of HRA received over the exempt amount is taxable.
Why the lowest of three
The tax rules cap the exemption so you cannot claim more than you actually receive, more than the rent you genuinely pay above 10% of salary, or more than the statutory percentage of salary. Whichever is smallest is the exempt amount.