HRA Calculator

(Calculate the tax-exempted HRA you get as per your salary)

The House Rent Allowance (HRA) calculator is an easy-to-use online tool that helps you figure out how much of your HRA is exempt from tax. You simply need to fill in your basic details, such as your salary, HRA received, and the rent paid. ... The HRA calculator will instantly inform you about your tax liability. This HRA exemption calculator makes the HRA income tax calculation much easier and helps you optimize your savings under Section 10(13A) and Rule 2A of the Income Tax Act, 1961. Read more

Basic Salary (p.a): ?

Dearness Allowance (p.a): ?

HRA Received (p.a): ?

Total Rent Paid (p.a):

Do you live in metro city like Delhi, Mumbai, Kolkata or Chennai?*

Yes No

Exempted HRA--

Taxable HRA--

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What is HRA?

House Rent Allowance (HRA) is a component of an employee's salary package provided by the employer to cover the cost of renting accommodation. It depends on multiple factors like the company’s policies, salary amount, city of residence, and more.

HRA not only helps you as an employee to manage your rental expenses but also affects your tax liability in the following ways:

Salaried Individual

Case 1: You receive HRA
If you receive HRA as part of your compensation, you can claim a tax deduction under Section 10(13A) and Rule 2A of the Income Tax Act, 1961. The details regarding the deduction amount are discussed later in this article.
Case 2: You do not receive HRA
In case your employer does not pay HRA, you can deduct the amount of rent paid from your taxable income under Section 80GG of the Income Tax Act.

Self-employed Individual: As HRA is not received, self-employed taxpayers can claim tax deduction on the rent paid under Section 80GG.

What is an HRA Calculator?

An HRA tax Calculator is a valuable online tool that assists individuals in calculating the potential tax benefits associated with their House Rent Allowance (HRA).

Under the Income Tax Act, HRA is partially exempt from taxation, subject to certain conditions and limits. The HRA deduction calculator simplifies the process of determining the amount of HRA exemption one can claim while filing income tax returns.

How is Exemption on HRA Calculated?

The exemption on HRA tax calculation is accomplished using Rule 2A of the Income Tax Rules. It is based on three values, and the lowest of these three is the amount you can claim as tax-free under Section 10(13A).

Here is how the HRA rebate calculation works:

Actual HRA received from your employer
50% of your salary (Basic + Dearness Allowance) if you live in a metro city (like Delhi, Mumbai, Kolkata, or Chennai), or 40% if you live in a non-metro city
Rent paid minus 10% of your salary (Basic + DA)

You calculate all three, and whichever is the lowest, that is the HRA exemption you can claim. The rest of the HRA, if any, becomes taxable income.

How is HRA Taxed?

If your total rent payments in a financial year exceed ₹1,00,000, you must provide your landlord's PAN while filing your income tax return. To make things clearer, let us look at an example to understand how much of your HRA (House Rent Allowance) can be exempted from tax.

Example:

Ayushi lives in Delhi (metro city) and pays ₹20,000/month as rent. She receives a Basic Salary of ₹40,000/month and DA of ₹5,000/month (which is part of her salary). Her employer gives her ₹90,000/year as HRA.

Sr No.	Particulars	Amount
1.	Actual HRA received (Yearly)	₹90,000
2.	50% of annual salary (₹40,000 + ₹5,000) × 12	₹2,70,000
3.	Rent paid (₹20,000 × 12 = ₹2,40,000) - 10% of annual salary	₹1,65,000
4.	HRA exemption = Least of 1, 2, and 3	₹90,000

So, ₹90,000 will be exempt from tax under Section 10(13A). If Ayushi received ₹90,000 as HRA in the year, then no part of it will be taxed; it is fully exempt in this case.

If you are paying rent but do not receive HRA (maybe you are self-employed or your employer does not offer it), you can still claim tax benefits under Section 80GG, but with some conditions and a cap on the amount.

How can an HRA Calculator Help You?

Tools like the House Rent Allowance calculator empower you to maximize your tax savings and enjoy the following benefits:

Accurate Calculation

An HRA calculator uses the information the user enters, such as basic salary, actual rent paid, and HRA received, to compute the optimal HRA exemption amount. It automates the calculation process, eliminating the margin of error.

Tax Optimization

As mentioned above, calculators can help you save money on taxes as per Section 10(13A) of the Income Tax Act, 1961. You can reduce your tax liability and optimize your financial strategies.

Customized Results

Employees from all walks of life and locations can use the calculator as it provides personalized results based on the user's specific financial information and tax profile.

Time-Saving

You do not have to perform manual calculations and deal with cumbersome paperwork. You can thus save your time and effort. What’s more, the user-friendly interface of HRA exemption calculators does not require specialized technical knowledge.

Scenario Analysis

You can check how your exempted amount will vary if you shift to a different location or your landlord changes the rent. This scenario analysis can help you make informed decisions accordingly.

Compliance Assurance

When you use the house rent calculator, you can accurately find out your tax liability. As a result, you can comply with tax regulations and avoid penalties or legal consequences.

How to Use the HRA Calculator Online?

HRA calculator is a convenient tool that helps you calculate your potential tax benefits related to House Rent Allowance. To use the HRA calculator income tax, just fill in your basic details:

Basic Salary: Enter the base amount you earn on your salary before any additional benefits or deductions.
Dearness Allowance (DA): Add the cost-of-living allowance paid to you by your organization (if they provide it).
HRA Received: Mention the amount of House Rent Allowance you are getting as part of your salary.
Total Rent Paid: Enter the total rent amount that you pay for your accommodation.
Metro City: Tick ‘Yes’ if you live in a metro city like Delhi, Mumbai, Kolkata, or Chennai.

Once you have entered all the details, the HRA calculator online will quickly show you how much HRA exemption you are eligible for under the income tax rules.

Benefits of HRA Calculation Using this Calculator

Online tools like the HRA tax calculator are always recommended as they can help you avoid complex calculations and present the required amount with just a few clicks.

You do not have to worry about making mathematical errors when you use the HRA calculator. It will give you the accurate HRA exemption amount based on salary, rent paid, and location.
There are multiple variables involved in the HRA exemption calculation. It becomes difficult to consider all these variables while performing manual calculations. Luckily, online calculators make this process easier and are designed to take all relevant factors into consideration.
The hassle-free and accurate calculations can help you claim your tax deductions and reduce taxable income efficiently.

What you save on rent can fund your future.

Maximise Your Savings

Documents Required for HRA Exemption Claim

To claim an HRA exemption, you need to be diligent about maintaining proper documentation, as specified below.

Rent Receipts
Rent Agreement
Cancelled Rent Cheques or Bank Statements
Landlord's PAN (Permanent Account Number)
Declaration Form (if required)
Form 10BA (if required)
Rental Agreement Utility Bills
Occupancy Certificate (if applicable)

Conditions for Claiming HRA Exemption

To claim HRA tax exemption, you need to meet certain conditions. Here are the key ones:

You must receive House Rent Allowance as part of your salary from your employer.
You must actually be paying rent for your residential accommodation.
The rented place should be used strictly for living purposes, not for business or other activities.
If your annual rent is more than ₹1,00,000, you must provide your landlord’s PAN (Permanent Account Number) as proof.
You, your spouse, or your minor child should not own a house in the city where you work or run a business.
The HRA exemption depends on whether you live in a metro city (like Delhi, Mumbai, Kolkata, or Chennai) or a non-metro city.
The exemption amount you can claim as HRA exemption will be the lowest of the following:

Actual HRA received from your employer
50% of your basic salary (if living in a metro) or 40% (if in a non-metro)
Rent paid minus 10% of your basic salary

You may need to submit a declaration confirming you are paying rent and do not own a house in the city where you work.

Conclusion

Understanding your HRA and how to calculate HRA in salary the right way can make a big difference in your tax bill. With tools like an HRA calculator, you do not need to be a tax expert. Just add in your details, and let the tool handle the math. Be it figuring out your HRA or thinking about how to invest ₹50 lakhs for monthly income, tax planning is key to financial success.

Use our HRA exemption calculator today and take one smart step closer to financial freedom!

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FAQs on HRA Calculator

1How is HRA calculated?

2How much of my HRA is exempt from tax?

3Can I claim HRA by paying rent to my parents?

4 What should I do if my landlord does not give me his PAN?

5What is 40% of salary in HRA?

6What should I do if I forgot to submit the rent receipts to my employer?

7Can I claim HRA if I am also claiming home loan deductions?

8How do I claim maximum HRA?

9Can I get a tax rebate if I am staying in my own house?

10Can I get both an HRA tax exemption and a tax rebate on my home loan?

11How is the exemption on House Rent Allowance (HRA) calculated?

12Is Dearness Allowance (DA) taken into account when calculating HRA?

13What is the procedure for calculating HRA exemption in my salary?

14What is the formula used for calculating HRA tax exemption?

15How much tax will I save on HRA?

16What is the HRA rule for salary?

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Disclaimers -

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.