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Tax-exempt HRA
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HRA lowers your taxable income under the Old regime. Feed it into the ITR calculator to compare New vs Old.
Open the ITR Calculator → Salary / Take-Home CalculatorWhat is HRA?
House Rent Allowance (HRA) is a salary component paid to employees who live in rented accommodation. Part of it can be exempt from income tax under section 10(13A) — but only if you actually pay rent and only under the Old tax regime.
The three-part HRA calculation
Your exempt HRA is the lowest of these three figures:
- Actual HRA received from your employer.
- Rent paid minus 10% of basic salary (basic + dearness allowance).
- 50% of basic if you live in a metro city (Delhi, Mumbai, Kolkata, Chennai), otherwise 40%.
Whatever is left of your HRA after the exemption is added to your taxable salary.
Documents and rules to remember
- Keep rent receipts and, ideally, a rent agreement.
- If annual rent exceeds ₹1,00,000, your landlord's PAN is required.
- You can claim HRA even while paying a home loan, if the conditions are genuinely met.
- Rent paid to family is allowed only if it is a real arrangement with proof.
Frequently asked questions
How is HRA exemption calculated?
It is the least of: actual HRA received; rent paid minus 10% of basic (plus DA); and 50% of basic for metros or 40% for non-metros.
Can I claim HRA under the new tax regime?
No. HRA exemption is only available under the Old regime. The New regime gives lower slab rates instead of these exemptions.
What counts as a metro city for HRA?
For HRA, only Delhi, Mumbai, Kolkata and Chennai are treated as metros (50% of basic). All other cities use the 40% limit.