HRA Exemption Calculator
Calculate your exact statutory House Rent Allowance tax deduction under Section 10(13A) of the Income Tax Act. Verify exemptions for Metro (50%) and Non-Metro (40%) cities, landlord PAN compliance, and monthly take-home salary tax savings.
Salary & Rent Parameters
Includes 4% Health & Education cess automatically in tax savings.
Annual Tax-Exempt HRA (Section 10(13A))
HRA Composition (Exempt vs Taxable)
Statutory 3-Condition Evaluation (Section 10(13A) Rule 2A)
Indian tax law mandates that your HRA exemption is deterministic and strictly equal to the lowest of the following three statutory calculations:
| Statutory Condition | Legal Formula | Computed Value | Status |
|---|---|---|---|
| 1. Actual HRA Received | From salary slip / employer allowance | ₹2,40,000 | Lowest (Exemption Applied) |
| 2. Salary Percentage Limit | 50% of (Basic + DA) for Metro | ₹3,00,000 | Higher |
| 3. Rent in Excess of 10% Salary | Rent Paid − 10% of (Basic + DA) | ₹2,40,000 | Higher |
Direct Definition (Position Zero AEO Summary)
HRA (House Rent Allowance) exemption under Section 10(13A) of the Indian Income Tax Act is a statutory deduction for salaried employees living in rented accommodation. The tax-exempt portion is strictly the lowest of three amounts: actual HRA received, 50% of Basic Pay (40% in non-metros), or rent paid minus 10% of Basic Pay.
Statutory HRA Exemption Formula (Rule 2A)
The Income Tax Department evaluates HRA deduction under Rule 2A of the Income Tax Rules, 1962. For statutory calculations, "Salary" is defined strictly as Basic Salary + Dearness Allowance (DA) forming part of retirement benefits.
// Statutory HRA Exemption = LEAST of the following 3 amounts:
1. Actual HRA Received from Employer
2. 50% of (Basic + DA) [Metro Cities] OR 40% of (Basic + DA) [Non-Metro Cities]
3. Actual Rent Paid - 10% of (Basic + DA)
Taxable HRA = MAX(0, Actual HRA Received - Statutory Exemption)
Metro Cities for 50% Rule: Delhi NCR, Mumbai, Kolkata, Chennai. All other cities qualify under the 40% non-metro rule.
Realistic Worked Examples: Mumbai vs Bengaluru
Case A: Mumbai (Metro City)50% Rule
A software engineer earning ₹15 Lakhs CTC in Mumbai receives ₹40,000 monthly Basic (₹4,80,000/yr), ₹20,000 HRA (₹2,40,000/yr), and pays ₹28,000 monthly rent (₹3,36,000/yr).
- • Condition 1: Actual HRA = ₹2,40,000
- • Condition 2: 50% of Basic = ₹2,40,000
- • Condition 3: Rent − 10% Basic = ₹3,36,000 − ₹48,000 = ₹2,88,000
- • Statutory Exemption: ₹2,40,000 (100% Tax-Free HRA)
- • Tax Saved: ₹74,880/year at 30% slab
Case B: Bengaluru (Non-Metro City)40% Rule
Same salary and rent parameters in Bengaluru. For Indian Income Tax purposes, only Delhi, Mumbai, Kolkata, and Chennai qualify as Metros. Bengaluru falls under the 40% non-metro ceiling.
- • Condition 1: Actual HRA = ₹2,40,000
- • Condition 2: 40% of Basic = ₹1,92,000
- • Condition 3: Rent − 10% Basic = ₹2,88,000
- • Statutory Exemption: ₹1,92,000 (Capped by 40% limit)
- • Taxable HRA: ₹48,000 added to taxable income
HRA Section 10(13A) vs Section 80GG Comparison
| Feature | Section 10(13A) (HRA) | Section 80GG (Rent Deduction) |
|---|---|---|
| Eligibility | Salaried employees receiving HRA component | Self-employed or salaried receiving NO HRA |
| Maximum Cap | No statutory maximum monetary ceiling | Capped strictly at ₹5,000/month (₹60,000/yr) |
| Formula | Lowest of HRA, 50%/40% basic, or rent − 10% basic | Lowest of ₹5k/mo, 25% total income, or rent − 10% income |
| Tax Regimes | Old Tax Regime only | Old Tax Regime only |
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