HRA Exemption Calculator
Calculate your House Rent Allowance tax exemption under Section 10(13A).
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HRA Exemption Breakdown
What is HRA and How Does It Work?
House Rent Allowance (HRA) is a component of your salary paid by your employer to help cover rental expenses. Under Section 10(13A) of the Income Tax Act, a portion of the HRA you receive can be exempt from tax, provided you actually pay rent for your accommodation.
The exempt amount is calculated as the minimum of three values: the actual HRA received, 50% of Basic+DA (metro) or 40% (non-metro), and rent paid minus 10% of Basic+DA. The remaining HRA, if any, is added to your taxable income.
HRA Rules: Metro vs Non-Metro
The percentage used in the second condition depends on your city of residence. If you live in Delhi, Mumbai, Kolkata, or Chennai, you get a higher exemption (50% of Basic+DA). For all other cities, it's 40%. This reflects the higher rental costs in metro cities.
Can I Claim HRA and Home Loan Deduction Together?
Yes, but only under specific conditions. You can claim both HRA exemption and home loan interest deduction (Section 24b) if: (1) you live in a rented house in one city and have a home loan on a property in a different city, or (2) you live in a rented house in the same city but have genuine reasons (e.g., the owned property is too far from your workplace). You cannot claim both for the same property.
Documents Needed for HRA Claim
- Rent receipts for all months claimed
- Rent agreement (if annual rent exceeds ₹1,00,000)
- Landlord's PAN (if annual rent exceeds ₹1,00,000)
- Declaration from landlord if PAN is not available
HRA Exemption Rules
Your HRA exemption is calculated as the minimum of the following three conditions:
| Condition | Exemption Amount | Example |
|---|---|---|
| Actual HRA Received | Full HRA amount | ₹20,000/month |
| 50% of Basic+DA (Metro) | 50% for Delhi/Mumbai/Kolkata/Chennai | If Basic=₹50,000 → ₹25,000 |
| 40% of Basic+DA (Non-Metro) | 40% for all other cities | If Basic=₹50,000 → ₹20,000 |
| Rent Paid − 10% of Basic+DA | Must be positive | Rent ₹25,000 − ₹5,000 = ₹20,000 |
HRA Exemption = Minimum of the above three conditions
Metro vs Non-Metro Cities
| Metro Cities (50%) | Non-Metro Cities (40%) |
|---|---|
| Delhi | All other cities |
| Mumbai | |
| Kolkata | |
| Chennai |
Documents Required for HRA Claim
- Rent receipts for all months claimed
- Rent agreement (if annual rent exceeds ₹1,00,000)
- Landlord's PAN (if annual rent exceeds ₹1,00,000)
- Declaration from landlord if PAN not available
Can I Claim HRA and Home Loan Together?
Yes, it is legally permissible to claim both HRA exemption under Section 10(13A) and home loan interest deduction under Section 24(b) simultaneously, but certain conditions must be met. The most straightforward scenario is when you own a house in one city (where you have a home loan) and live in a rented accommodation in a different city due to employment. In such cases, both claims are fully allowed without any restrictions.
If you own a house and live in a rented property in the same city, you can still claim both benefits, but you must have a genuine reason. Valid justifications include: the owned property is located far from your workplace and commuting daily is impractical, the owned property is too small for your family, or the property is under construction and not yet habitable. The Income Tax Officer may ask for justification, so it is advisable to maintain documentation supporting your claim.
However, you cannot claim HRA exemption if you live in your own house or if the house you own is in the same city and there is no valid reason for renting another property. The home loan deduction under Section 24(b) allows up to ₹2,00,000 per year for self-occupied property, while HRA exemption depends on your salary structure and rent paid. Together, these two provisions can significantly reduce your tax liability if used correctly.