HRA Calculator

What is HRA?

HRA stands for House Rent Allowance. It is an allowance provided by an organization’s employer to an employee to cover the cost of living in a rented accommodation. The HRA of an employee depends on their salary, city of residence, organization’s salary structure, etc. 

Generally, house rent allowance is a fixed percentage of an employee’s basic salary. Tax exemption on this allowance can be claimed under Rule 2A of Income Tax 1961. It is important to note that self-employed individuals cannot claim a house-rent allowance. However, they can avail tax deduction towards rented accommodation under Section 80GG of the Act.

What is HRA Calculator?

HRA exemption calculator India is an online tool that allows you to calculate the amount of your HRA tax exemption. Many websites and apps allow you to use this calculator free of cost. 

To use the HRA calculator, you must provide details like dearness allowance, basic salary, HRA received and total accommodation rent paid in a year. 

How to use Registrationwala’s HRA Calculator 2025?

Registrationwala offers free HRA Online calculator. You can use this calculator to get an estimate of your house rent allowance within seconds. 

To use this calculator, you must follow the instructions below:

Step 1: Enter your basic salary and dearness (per annum).

Step 2: Now, enter the HRA amount you receive and total rent you pay (per annum).

Step 3: Afterwards, answer whether you live in a metro city with “yes” or “no”.

Step 4: Based on the details you provide, Registrationwala’s HRA tax deduction calculator will calculate your house rent allowance within seconds.

How Much HRA is Tax-Exempt?

As per income tax rules, the tax-exempt portion of your HRA cannot exceed the least of the following three factors:

• The actual HRA received.

• 50% of your basic salary if you live in Delhi, Chennai, Kolkata, or Mumbai (or 40% for other cities).

• Actual rent paid should be less than 10% of pay (basic pay plus dearness allowance).

To make things easier, you can use Registrationwala’s HRA tax savings calculator to find out how much HRA will be exempt from tax.

How Can I Claim HRA Exemption?

You must meet the following criteria for claiming exemption:

• You must live in a rented accommodation.

• You must receive a house-rent allowance as part of your Cost To Company (CTC).

• Ensure you have valid rent receipts and proof or rent payments.

• Calculation of HRA exemption shall depend on several factors like salary, rent paid, HRA received and employee’s residence city. So, make sure you have required documentation to prove such details.

HRA Calculation with Example

Let’s understand the HRA calculation for salaried employees using an example. Let us assume an employee named Anjali lives in Mumbai, which is a metro city. Her basic salary is Rs. 50,000 per month. Her HRA is Rs. 20,000 per month. She pays Rs. 18,000 every month as actual rent. Her dearness allowance is Rs. 5000 per month (if applicable for HRA calculation). 

Now, according to these details, HRA Exemption Calculation (as per Income Tax Act, Section 10(13A)) would be:

• Actual HRA received: Rs. 20,000

• Actual rent paid minus 10% of basic salary:

• Rs. 18,000 - (10% of Rs. 50,000)

• Rs. 18,000 - Rs. 5,000 = Rs. 13,000

• 50% of basic salary (since Mumbai is a metro city):

• 50% of Rs. 50,000 = Rs. 25,000

HRA Exemption Calculation

The following is the calculation for HRA exemption:

• The lowest amount among Rs. 20,000, Rs. 13,000, and Rs. 25,000 is Rs. 13,000. So, Rs. 13,000 per month (Rs. 1,56,000 annually) is exempt from tax.

• The remaining Rs. 7,000 per month (Rs. 84,000 annually) will be added to Anjali’s taxable income.

Benefits of HRA Calculator

Some of the key benefits of House-Rent Allowance calculator are as follows:

• The HRA-calculating tool allows you to calculate allowance for house rent exemption easily and quickly. All you have to do is enter certain basic details, such as basic salary, HRA received, rent paid and the residence city (metro or non-metro). Accordingly, the calculator will provide you with the desired details. 

• It provides a better estimate compared to when you calculate manually. It takes into account the latest tax rules to calculate the exemption amount and ensures you can claim the maximum exemption.

• This calculator is available online for free. You can use it and save up a lot of your time that you’d waste on manually calculating the HRA tax deduction amount. The HRA calculator can do the same job within seconds.

• It helps you to maximize your tax exemption and makes sure you don’t overpay taxes. You can have peace of mind when you know that you are saving as much tax as possible. You can use the money you save on taxes for other important expenses.

FAQs: HRA 

Q1. How to use an HRA calculator?

A. To use an HRA calculator, you must provide basic salary, dearness allowance, HRA received and total rent paid. Additionally, you must mention whether you live in a metro city or not.

Q2. What is the HRA percentage on basic pay?

A. The HRA percentage on basic pay is 50% for an employee living in a metro city and 40% for an employee living in a non-metro city.

Q3. Is the landlord’s PAN card required to claim HRA exemption?

A. Yes, if the accommodation rent exceeds Rs. 1 lakh in a year, a copy of the landlord’s PAN is required to successfully claim HRA exemption.

Q4. Which Act governs HRA exemptions?

A. Section 10(13A) of the Income Tax Act governs exemptions for House Rent Allowance (HRA).

Q5. Is dearness allowance taken into account while calculating HRA?

A. Yes, dearness allowance is taken into account during HRA calculation.