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HRA Calculator

Basic Salary

Dearness Allowance

HRA Received

Rent Paid

Residency Status

  

Exempted House Rent Allowance

Taxable House Rent Allowance

What is House Rent Allowance (HRA)?

House Rent Allowance (HRA) is a component of Income under the head Salary provided by the employer to its employees for rented accommodation. HRA comes under Section 10 of Income Tax Act, 1961 and the exemption can be claimed partially or fully. HRA taxable and HRA Exempted can be calculated by using the latest HRA calculator. It is based on the Salary of a person. Some other factors like dearness allowance, commission earned, city of residence (Metro City or Non Metro City) impacts the calculation. If the place of residence is a metro city, then employee can avail an exemption upto 50% of the salary. For all others cities, the entitlement is upto 40% of the salary.

For the purpose of calculating the HRA exemption, the salary is defined as the sum of the basic salary, dearness allowances and other commissions.

What are the HRA Exemption Rules?

The exemption for HRA benefit is the minimum of:

  • Actual HRA received
  • 50% of salary if living in metro cities, or 40% for non-metro cities; and
  • Excess of rent paid annually over 10% of annual salary

The tax benefit is available to the person/employee only for rented accommodation and only for the period for which the rented house is occupied.

Example of Exempt HRA calculation

Suppose an individual, with a monthly basic salary of Rs. 50,000 receives HRA of Rs. 25,000 and pays Rs. 12,000 rent for an accommodation in a metro city.

To avail HRA benefit, the least of the following amount (yearly) is exempted, rest is taxable:

  • Actual HRA received is Rs. (25,000 x 12) = Rs. 3,00,000
  • 50% of salary (metro city) is Rs. [(50,000 x 12) x 50%)] = Rs. 3,00,000
  • Excess of rent paid annually over 10% of annual salary is Rs. (12,000 x 12) – 10% of salary [(Rs. 50,000 x 12)]= Rs. 84,000

Rs. 84,000 is the least among the above-obtained figures, so Rs. 84,000 is the Exempted House Rent Allowance.

With the help of HostBooks HRA calculator, you can easily calculate both Exempted House Rent Allowance and Taxable House Rent Allowance.

What are the FAQs on House Rent Allowance?

House Rent Allowance can be claimed by those employees who are living in rented accommodations. Self-employed individuals and those who live in their own houses cannot claim HRA.
No, in this case HRA cannot be claimed.
If the annual rent paid by you exceeds Rs. 100,000 in one financial year, the landlord’s PAN details need to be provided.
If the monthly rent exceeds Rs. 3000, the rent receipts need to be submitted.
No, the HRA benefit is available for only one house in the concerned city of the workplace.
As per the notification issued by the government, a person claiming HRA for over Rs. 1, 00, 000 needs to furnish name, address and PAN i.e. Permanent Account Number of the landlord, apart from giving the rent receipts.
Yes, the Dearness Allowance is included in the HRA exemption calculation.
No, the HRA is paid towards rent only. Hence, it does not include maintenance and electricity charges.
If the annual rent exceeds Rs. 1, 00,000 per annum, it is mandatory for the employee to obtain the PAN card from the landlord. If the landlord does not have a PAN, a declaration needs to be obtained that will include details such as landlord's name, address, the rent amount you are paying, and the period of accommodation.
If the annual rent exceeds Rs. 1, 00,000 per annum, it is mandatory for the employee to obtain the PAN card from the landlord. If the landlord does not have a PAN, a declaration needs to be obtained that will include details such as landlord's name, address, the rent amount you are paying, and the period of accommodation.