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HRA Calculator Online (House Rent Allowance)

Planning your finances wisely is crucial to ensure a stable and comfortable life. When it comes to managing your income, understanding the intricacies of your salary package is essential. One aspect that often plays a significant role in determining your take-home pay is the House Rent Allowance (HRA). To simplify this process, we bring you the HRA Calculator Online. With just a few clicks, you can effortlessly calculate the HRA component of your salary. This tool considers various factors, such as your basic salary, actual rent paid, and the city you reside in, to provide you with an accurate estimate of your HRA entitlement. Our Online HRA Calculator considers the current regulations and guidelines set by the government, ensuring accuracy and compliance with the latest laws. This way, you can trust that the results are reliable and up-to-date.


The number of working Indian number is increasing, and thereby the requirements for clarity upon taxes and all tax-related items are also growing. Professionals and the working India are learning more about how to lessen their tax burden and save more money, including utilising tax-saving investment options like the Public Provident Fund (PPF) and ITR.

Salary has major components, referring to our Salary in India with its Components article. Amongst this, HRA or House Rent Allowance is one of the major components as it is important to aid the working employee to cover their costs for relocating or living in a rented house or with their parents. Additionally, HRA is a crucial part of the salary, providing financial support for housing expenses. If a taxpayer lives in rented housing, the House Rent Allowance or the HRA portion of their wage lowers their tax obligation. Online HRA Exemption Calculators may be used to determine how much of an HRA will be tax-exempt. The hand can also do the calculation, which might land you committing mistakes and making the wrong calculation.

How is the HRA Made?

Your salary is the key factor in the house rent allowance or HRA. As per the income tax regulations, the HRA's tax-exempt portion must be at least one of the amounts provided below:

A HRA Calculation Example

Let's take the case of Mr Sudheep, a salaried resident of Mumbai, as our example. He pays Rs 20,000 in rent each month for his rented home. This comes to Rs 2.4 lakhs during one year. The following table displays his monthly earnings:

S.No Particulars Amount (in Rs.)
1 Basic Salary 40,000
2 House Rent Allowance or HRA 23,000
3 Conveyance Allowance 2,000
4 LTA (leave travel allowance) & other allowance 10,000
5 Total Earnings 1,75,000

A deduction for PF amounting to Rs 3,000 and professional tax of Rs 200 is made from Mr Sudheep's monthly salary.

Considering Mr Sudheep's annual wages, the tax-exempt portion of his HRA would be the least expensive or the lowest of the following:

Particulars Amount (in Rs.)
Actual HRA earned by Mr. Sudheep as salary component 2,76,000
50% of basic salary (living in Mumbai) 2,40,000
Actual rent paid by Mr. Sudheep (less) 10% of basic salary [(20,000 (-) 40,000*10%)*12] 1,92,000

Mr Sudheep is eligible for a tax exemption on HRA amount up to Rs 1,92,000, as it is the lowest value shown above. Based on his city of residence, the remaining HRA sum will be taxed under his taxable income tax bracket.

HRA Tax Breaks

The real rent you pay must be less than 10% of your basic wage.

The real amount provided by your company as HRA

If you live in a metropolis, you will be paid 50% of your basic wage, and 40% if you live elsewhere.

Documents Required to Claim HRA Tax Exemption

Rent receipts to the rental agreement are the key document to be given when seeking tax exemption for HRA. You will be qualified for this exemption as a taxpayer even if you pay rent to your paramour.

To become eligible for an HRA tax exemption, you must furnish your rent payment receipts as the taxpayer. In situations where the yearly rent of the dwelling unit exceeds Rs.1 lakh, the landlord's or landlady's PAN data must also be submitted. If the landlord or landlady does not have a PAN card, he or she can offer a self-declaration with the same information.

Can I claim both the HRA tax exemption and the house loan interest deduction at the same time?

Yes, this is a possibility. You may be renting a house in one city while owning a house (for which you are owning a home loan) in another city. You can deduct the rent paid from your HRA. You can also deduct the interest paid on your house loan. Home loan principal payments are also eligible for a tax deduction.

Salary in India with its Components

Organizations pay their employees wages in exchange for the services they provide. These pay features frequently include a:

base salary, Allowances, Perquisites, and So on.

While processing payroll, it is critical to understand how salaries are constructed and the numerous processes connected with them. A wage structure is the foundation for determining an employee's remuneration plan. While wage structure is important for human resources (HR) and payroll staff, many lack the technical competence to build a salary structure with sound principles.

Key phrases in the Indian salary structure or system

A pay structure is intended to give out the anatomy of the salary offered in terms of the compensation plan's many components. Employees must have a basic understanding of the various components of their wages to organise their finances and optimise their claims on the numerous tax exemptions available to them. Before we go any further, let us define a few key concepts.


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Gross wage

This is an employee's total earnings before statutory and non-statutory deductions. It also involves compensation reductions dependent on employee attendance.


The overall monetary benefit the employer delivers for the fiscal year is the CTC. This includes the employer's PF contribution, gratuity provision, insurance, and other perks.

Variable and fixed pay

A predetermined sum of money an employer provides to its workers in exchange for services done in the form of a fixed wage is referred to as fixed pay. Fixed pay is the salary slip's accrual salary with basic and numerous allowances. It is the monthly fixed payment made to employees.

An employee's wage structure may include both fixed and variable components. Depending on the company's policy, the variables and incentives may or may not be credited every month.

The parts of fixed pay would include the following:

Basic pay, dearness allowance (DA), housing rent allowance (HRA), conveyance allowance, and other special allowances.

An example of variable pay is the part of an employee's salary that is decided by their performance. Variable pay is offered as an additional incentive or commission when employees reach their sales objectives.

Variable compensation is often dependent on two key factors:

the success of the individual and the performance of the organization. As a result, most such corporate schemes relate their variable components to objectives, and the actual pay-out depends on that combination.

Some typical wage structure components

Some typical wage structure components would include:

The starting basic salary or wage

The basic salary is the base pay earned by a person who is an employee, which accounts for about half of the CTC. It is a sum of money fixed in advance and paid before any deductions are made from salary or any other bonus or additional payments are made.

a. bonuses, b. overtime, or c. allowances.

The employee's position and the industry in which they work decide the basic wage. The majority of the other components, such as allowances, are dependent on base wages. This sum is completely taxed.


An allowance is a stipend paid to employees regularly. Depending on the type of allowance, it may be partially or entirely taxed. The allowances offered, and their corresponding restrictions will vary from business to firm, depending on their unique rules.

Different types of allowances

Dearness allowance or DA:

Dearness allowance is a proportion of the base wage granted to employees intended to offset the impact of inflation. The government provides it to public sector employees and retirees. Dearness allowance is completely taxed regardless of whether it is "in terms" or "out of terms." Note that DA refers to DA included in the computation of retirement benefits.

HRA (House Rent Allowance):

Employees get a house rent allowance to help them meet their monthly housing or accommodation expenditures. It provides tax breaks to employees for the amount they pay for housing or their accommodation each year.

Salaried persons who live in rented housing can claim this exemption and decrease their tax payment in full or in part. This stipend is taxed if an employee does not reside in rental housing.

The following amounts are excluded under Section 10(13A):

Frequently Asked Questions

I failed to turn in my rent receipts to my boss. How can I get the HRA tax credit now? + In this instance, you can claim the HRA tax advantage while filing your income tax returns. You should maintain documentation of rent payments on hand since you may be needed to present these documents to the Income Tax department to validate your claim.
Is it possible to seek a tax exemption on HRA? + No, we cannot say that all the people having HRA component in his or her salary are eligible for HRA tax exemption. Although HRA is one of the major and common components that is included in most or every employees' salaries, those who pay rent can only avail the exemption. The HRA exemption does not apply to self-employed persons.
Can I receive HRA tax relief while renting to a family member?+ If you pay rent to your parents, you can claim a tax break on your HRA. You should, however, have adequate documentation to serve as verification of this transaction.
My income does not include HRA, yet I live in rental housing. Can I claim any tax breaks?+ If a person pays rent for an unfurnished or furnished dwelling, he or she can claim a tax deduction on the rent paid (under Section 80 (GG) of the Income Tax Act)., as long as HRA is not part of his or her wage. Form 10B should be submitted for this reason.
Can the maintenance fees I pay for my apartment go toward HRA tax exemption? + No, HRA exemption may only be claimed for rent paid. You will not be able to deduct the costs of maintenance or power. These fees are also not included in the landlord's profits when computing income tax.
How is HRA calculated? + Your HRA is equal to 50% of your basic pay if you reside in a major city. In any other city, your HRA should be 40% of your base salary. If you do not receive any commissions or dearness allowance, your HRA should be between 40% and 50%.
Who can claim HRA exemption? + Employees and self-employed professionals who do not get the House Rent Allowance can claim HRA tax exemptions for expenses incurred in paying the house rent under this Section of 80GG.
What is the HRA exemption limit? + Actual HRA received, annual rent paid at 10% of salary less, 50% of your basic pay (if you reside in a metropolitan area), 40% of your basic salary, and 50% of your basic salary (if you live in a non-metro city).