Financial Calculators
HRA Exemption Calculator
Calculate the HRA exemption claimable under Section 10(13A) of the Income Tax Act.
This tool provides an estimate or a starting draft. Check the assumptions and current official requirements before relying on the result. It does not replace qualified financial, legal or medical advice.
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House Rent Allowance (HRA) is a component of your salary that helps cover rental expenses. Under Section 10(13A) of the Income Tax Act, a portion of HRA received from your employer is exempt from tax — but only if you are actually paying rent for accommodation. HRA exemption is available exclusively under the Old Tax Regime; those opting for the New Regime cannot claim this exemption.
The HRA exemption is the minimum of three conditions: (a) Actual HRA received from the employer, (b) Rent paid minus 10% of basic salary + DA, and (c) 50% of basic + DA for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metro cities. The qualifying rent condition (b) ensures that only the rent exceeding 10% of salary gets exempted — this prevents employees from claiming fake rent receipts for trivial amounts.
To claim HRA exemption, you must furnish rent receipts to your employer (or the IT department during filing). If annual rent exceeds ₹1 lakh, you must also provide the landlord's PAN. For tenants renting from close relatives, the landlord must include the rent received as income in their own ITR — paying rent to parents is a common and legitimate tax-saving strategy, provided it's genuine.
How to use this utility
- Use the controls below—paste text, pick files, or adjust options as described on the tool.
- Click the main action button. Processing runs in your browser on this device.
- Download or copy the output. Check the processing note for any external services used by this operation.
Common use cases
- A salaried employee in Bengaluru earning ₹60,000 basic with ₹24,000 HRA and paying ₹20,000/month in rent wants to know the exact exemption amount.
- Someone in a non-metro city wants to check if they should pay higher rent to maximise the HRA exemption under condition (b).
- An employee is deciding between the old and new tax regime and needs to quantify the exact HRA benefit in the old regime.
- A person who recently moved to a metro city wants to recalculate their HRA exemption after the city-type change.
- An HR professional is verifying an employee's HRA exemption claim before processing the TDS calculation.
Tips for best results
- 1To maximise HRA exemption, ensure your rent paid exceeds 10% of basic. If rent is below this threshold, condition (b) becomes zero and you lose the exemption entirely.
- 2Pay rent to your parents and claim HRA. Your parents receive the rent as income (typically exempt if they are below the taxable limit), while you get the full HRA exemption. Ensure a written rent agreement exists.
- 3If you don't receive HRA from your employer but pay rent, you can still claim deduction under Section 80GG (up to ₹60,000/year), but this is subject to conditions.
- 4Keep all rent receipts for the financial year. If rent in any month exceeds ₹5,000 (₹6,000 for some jurisdictions), the receipt must carry a ₹1 revenue stamp.
- 5The city classification for HRA is based on where you actually reside, not where your office is. Satellite cities near metros (Noida, Gurugram, Navi Mumbai) are non-metro for HRA purposes.
Frequently asked questions
- Is Konnect2Tools free?
- Yes. These in-browser tools are completely free to use with no account required for core functionality.
- Do my files leave my device?
- Browser document operations run locally, except where the operation uses an external service, such as AI summarisation. Read the processing note before using sensitive inputs.
- Is the HRA Exemption Calculator tool safe to use?
- Local operations process document content on your device. External-service operations may send inputs as described in the processing note. Keep originals and inspect the output.
- Can I claim both home loan deduction and HRA?
- Yes, if you own a home but live in a rented house (for example, your owned property is in another city or rented out), you can claim both home loan interest deduction under Section 24 and HRA exemption under Section 10(13A) simultaneously.
- Is HRA available for accommodation owned by family?
- No. If you live in a house owned by your parents, you cannot claim HRA unless you pay rent to them under a genuine rent agreement and your parents declare it as rental income in their ITR.
- What happens if I don't submit rent receipts to my employer?
- Your employer will deduct TDS on the full HRA amount. You can still claim the exemption by furnishing rent receipts when filing your ITR and receive a tax refund for the excess TDS paid.
- What is the difference between 40% and 50% HRA?
- The 50% limit applies to metro cities — Delhi, Mumbai, Kolkata, and Chennai as specified in the Income Tax Act. All other cities including Bengaluru, Hyderabad, Pune, and Ahmedabad use the 40% limit, making the maximum exemption lower in these cities.
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