HRA Exemption Calculator – Calculate Tax Exempt HRA Under Section 10(13A)

The PlanMyReturns HRA Exemption Calculator helps salaried employees calculate how much of their House Rent Allowance (HRA) is exempt from tax and how much becomes taxable under Section 10(13A) of the Income Tax Act.

This calculator answers one key question:

“How much tax can I save on HRA?”

It follows exact Income Tax rules, works for metro and non-metro cities, and shows a complete exemption breakdown so you can plan rent and taxes better.

What Is HRA (House Rent Allowance)?

House Rent Allowance (HRA) is a salary component paid by employers to employees to cover rental housing expenses.

If you live in a rented house and receive HRA, a part of it can be claimed as tax-exempt, subject to conditions defined under Section 10(13A).

Who Can Claim HRA Exemption?

You can claim HRA exemption if:

• You are a salaried employee
• You receive HRA as part of salary
• You pay rent for accommodation
• You opt for the old tax regime

Important: HRA exemption is not available under the new tax regime.

Why Use an HRA Exemption Calculator?

Most employees struggle to understand:

• How much HRA is actually tax-free
• Whether their rent is high enough to maximize exemption
• How metro vs non-metro cities affect exemption
• Why part of HRA becomes taxable

This calculator removes confusion by showing clear numbers and logic, exactly as per tax law.

What This HRA Calculator Calculates

Using your inputs, the calculator shows:

• HRA exemption amount
• Taxable portion of HRA
• Optimal monthly rent to maximize exemption
• Actual HRA received from employer
• Detailed exemption calculation under all three rules

All results are calculated exactly as per Section 10(13A).

Inputs Used in HRA Calculation

The calculator uses the following inputs:

• Annual Basic Salary
• Dearness Allowance (DA)
• HRA received during the year
• Actual rent paid
• City type (Metro or Non-Metro)

Basic salary and DA are combined as required by law.

Metro vs Non-Metro Cities

HRA exemption limits depend on where you live.

• Metro cities: Delhi, Mumbai, Chennai, Kolkata
  → 50% of salary considered
• Non-metro cities: All other cities
  → 40% of salary considered

The calculator automatically applies the correct limit based on your selection.

How HRA Exemption Is Calculated

As per Section 10(13A), HRA exemption is the minimum of the following three values:

1. Actual HRA received
2. Rent paid minus 10% of salary (Basic + DA)
3. 50% of salary (Metro) or 40% of salary (Non-Metro)

Formula Summary

HRA Exemption = Minimum of:
A = Actual HRA received
B = Rent paid − 10% of (Basic + DA)
C = 50% / 40% of (Basic + DA)

Any remaining HRA becomes taxable income.

HRA Example

Suppose:

• Basic salary: ₹6,00,000 per year
• DA: ₹0
• HRA received: ₹3,00,000
• Rent paid: ₹3,60,000
• City: Metro

Calculation:

• Rent − 10% of salary = ₹3,00,000
• 50% of salary = ₹3,00,000
• Actual HRA received = ₹3,00,000

Result:

• HRA Exempted: ₹3,00,000
• Taxable HRA: ₹0

The calculator shows this clearly along with optimal rent guidance.

Optimal Rent: How Much Rent Should You Pay?

The calculator also shows minimum monthly rent required to fully utilize HRA exemption.

This helps you answer:

• Am I paying enough rent to save tax?
• Will increasing rent increase exemption?
• When does exemption stop increasing?

How to Use the PlanMyReturns HRA Calculator

1. Enter annual basic salary
2. Enter DA (if applicable)
3. Enter HRA received
4. Enter annual rent paid
5. Select city type
6. Click Calculate

You can also:

• Share a prefilled calculation
• Copy calculation link
• Reset and test scenarios

HRA Exemption vs New Tax Regime

If you receive HRA and pay rent, the old tax regime is usually beneficial.

Common Mistakes While Claiming HRA

• Claiming HRA under the new tax regime
• Not subtracting 10% of salary from rent
• Using gross salary instead of basic + DA
• Claiming rent paid to parents without documentation

This calculator avoids these errors by design.

Why PlanMyReturns HRA Calculator Is Better

• Follows exact Income Tax rules
• Metro and non-metro logic built-in
• Shows exemption and taxable amount clearly
• Provides optimal rent insight
• Shareable and easy to use
• No registration required

frequently asked questions