How HRA Exemption is Calculated
House Rent Allowance (HRA) is a salary component that can be partly or fully exempt from tax if you live in rented accommodation. The exemption is available under Section 10(13A) of the Income Tax Act, but only under the old tax regime.
The exempt amount is the lowest of three values: the actual HRA received, 50% of your basic salary (for metro cities) or 40% (non-metro), and the rent you pay minus 10% of your basic salary. Our calculator computes all three and shows you the exemption.
Frequently Asked Questions
Is HRA exemption available in the new tax regime?
No. HRA exemption under Section 10(13A) is only available if you opt for the old tax regime.
Which cities count as metro for HRA?
Only Delhi, Mumbai, Kolkata, and Chennai are treated as metro cities, where 50% of basic salary is used in the HRA calculation. All other cities use 40%.