HRA Calculator

Want to maximise your tax savings?

If you are a salaried individual, understanding how to leverage House Rent Allowance (HRA) is crucial for maximizing tax savings. The HRA Calculator simplifies this process. It helps users optimize their exemptions and ultimately save on taxes. Users can utilize the HRA Calculator to unlock the full potential of their HRA benefits to maximize exemptions and enhance their financial planning.

For example: Arun lives in Mumbai and has a basic salary of Rs. 50,000 p.m. He receives HRA of 25,000 from basic salary and pays a rent of Rs. 15,000. His HRA exemption will be least of the following:

HRA received: Rs. 25,000 x 12 = Rs. 3,00,000
Rent paid: (Rs. 15,000 x 12) - 10% of basic salary= Rs. 1,20,000
50% of basic salary: [(Rs. 50,000 x 12) x 50%] = Rs. 3,00,000 Comparing these figures, the lesser amount is Rs. 1,20,000. Therefore, Arun is eligible for an exemption of Rs. 1,20,000 based on his HRA calculation.

₹ HRA Recieved P.A.

₹ Rent Paid P.A.

₹ Basic Salary P.A.

* Basic salary includes dearness allowance

Email ID

Please fill all the mandatory fields to Calculate

HRA Calculator

Taxable HRA & Exempt HRA :

Taxable HRA

Exempt HRA

Total HRA

List of the following is exempt [Section 10(13A)]

50% of salary, if accommodation is located in Mumbai, Kolkata, Delhi or Chennai (or) 40% of salary, if accommodation is located in any other city, for the relevant period

Rent paid (-) 10% of basic salary for the relevant period

HRA actually received

Exempt HRA

Calculate Again

What is HRA?

House Rent Allowance (HRA) is a key component of an employee's salary, offering tax benefits by reducing taxable income and allowing exemptions based on actual rent payments. It provides financial relief for renters and encourages employees to invest in suitable living spaces without compromising their financial stability.

How HRA Benefits Employees

House Rent Allowance (HRA) offers significant financial relief to employees residing in rented accommodations. This salary component is a crucial point in the salary. It provides tax benefits by reducing taxable income. Employees can claim exemptions based on actual rent payments, easing the financial burden of renting while encouraging investment in suitable living spaces without compromising financial stability. HRA plays a vital role in enhancing employees' financial well-being by offering savings and tax benefits within their salary package.

Eligibility for HRA Exemption

To claim House Rent Allowance (HRA) exemption, an employee must meet specific eligibility criteria:

Employment Status: The individual must be a salaried employee to qualify for HRA exemptions.
Rented Residence: The individual should reside in a rented accommodation and pay rent to be eligible for HRA tax benefits.
Documentation: Proper documentation, such as rent receipts or rental agreements, is essential to claim HRA tax exemption.
Self-Employed Individuals: Self-employed individuals are not eligible for HRA exemption but can claim deductions under Section 80GG of the Income Tax Act.
Residence Criteria: Individuals must live in the rented accommodation to claim HRA exemption; residing in one's own house disqualifies them from this benefit.

Conditions to claim HRA Exemption

To claim HRA exemption, the following conditions must be met:

Rent payment: Rent must be paid to a landlord.
Documentation: Valid documentation is required if rent is paid to family members for eligibility criteria.
Rent receipts: Rent receipts for the relevant financial year need to be provided.
Deductions: Deductions can be availed under either Section 10(13A) or Section 80GG, not both.
HRA Deduction: The maximum HRA deduction, as per Section 10(13A), is limited to the actual HRA received from the employer

How To Use TaxBuddy’s HRA Calculator?

For using TaxBuddy’s HRA Calculator, the process is as follows:

Access the Calculator:

Navigate to https://www.taxbuddy.com/ > Resources > Calculators > Select HRA Calculator

Select the appropriate financial year, and Select the city. Enter the details such as:

HRA received p.a., Rent Paid pa., Basic Salary p.a., and Email ID. Click on the ‘Calculate’ button.

The exempt amount of HRA will be reflected on the screen.

Maximizing Your HRA Exemption

Here are the tips to maximize your HRA Exemption

Keep detailed records of medical expenses.
Understand HRA rules and limits.
Use a reliable online calculator.
Input accurate information for best results.
Consult a tax professional for personalized advice.

Special Cases in HRA Calculation

When it comes to House Rent Allowance (HRA) calculation, these special scenarios can impact how tax exemptions are determined:

Owning a house in a different city does not disqualify you from claiming HRA benefits, allowing you to deduct the cost of paying home loan EMIs from your taxes.
Additionally, paying rent to parents can also qualify for HRA exemption if they own the house and declare the rental income.
It's essential to provide appropriate documentation such as rental agreements and rent receipts to substantiate these assertions.

Understanding these special cases ensures accurate HRA calculations and maximizes tax savings.

Documents Required for HRA Claim

To claim HRA exemption, essential documents are required:

Rent Receipts: The documents required are- Proof of rent payments with details like landlord's information, rent amount, and payment period.
Rent Agreement or Lease Deed: Validates the tenancy terms and supports the HRA claim.
Landlord's PAN: Mandatory for HRA exemption if annual rent exceeds a certain threshold.
Declaration of HRA: Form submitted to employers stating the HRA received.
Utility Bills: Optional but can further substantiate the claim by showing residence at the rented accommodation.

Frequently asked questions

How does the HRA Calculator work?

The HRA Calculator determines the portion of House Rent Allowance (HRA) that is exempt from tax based on factors like actual rent paid and salary components.

Can I claim HRA if I own a house?

Yes, you can claim HRA if you own a house in a different city and live in a rented property, allowing you to benefit from both scenarios.

How can I maximize my HRA exemption?

To maximize HRA exemption, ensure accurate documentation, claim HRA on your tax returns, and adjust taxable income to include HRA for potential refunds.

What documents are required for claiming HRA exemption?

Essential documents include rent receipts, rent agreement, landlord's PAN, HRA declaration form, and utility bills to support the HRA claim.

How is HRA exemption calculated?

HRA exemption is calculated based on factors like actual HRA received, actual rent paid, and city of residence, with the least of these amounts being eligible for tax exemptions.

Is HRA exemption applicable to those living with parents?

Yes, individuals living with parents can claim HRA exemption by paying rent to parents who own the house and declare the rental income.

Can both spouses claim HRA exemption for the same rent?

If spouses share rent expenses, only one can claim the entire amount for HRA deduction, but both can claim individually with separate rent invoices.

What if my employer does not provide HRA?

Even if your employer does not offer HRA, you can still claim HRA benefits under Section 80GG by submitting Form 10BA.

How can I maximize my HRA exemption?

To maximize HRA exemption, ensure accurate documentation, claim HRA on your tax returns, and adjust taxable income to include HRA for potential refunds.

Can I claim HRA exemption without submitting rent receipts to my employer?

If you didn't submit rent receipts initially, you can still claim HRA exemption when filing income tax returns by adjusting taxable income to include HRA.

What should I do if my landlord does not have a PAN?

If your landlord does not have a PAN and you pay rent exceeding a specified threshold, it is crucial to ensure they obtain a PAN to claim HRA exemption.