House Rent Allowance calculator
HRA Exemption rules
The exemption on HRA is the minimum of 3:
- Total HRA received in full year
- 50% of basic salary if living in metro cities (Delhi, Mumbai, Chennai, Kolkata), 40% for non-metro cities
- Excess of rent paid annually over 10% of annual basic salary
Now let us understand in details with an example
Basic salary: 50,000 per month
HRA received: 25,000 per month
Rent paid: 20,000 per month
Calculations
- Annual HRA received: (25,000 x 12) = 3,00,000 ₹
- 40% of basic salary: [(50,000 x 12) x 40%)] = 2,40,000 ₹
- Excess of rent paid annually over 10% of annual salary: (20,000 x 12) – 10% of (50,000 x 12) = 1,80,000 ₹
So the minimum of above 3 is : 1,80,000 ₹ which is not taxable
Remaining HRA amout 3,00,000 - 1,80,000 = 1,20,000 ₹ will be taxable
Frequently asked questions FAQ
What is house rent Allowance (HRA) ?
HRA is a component in salary which employees receive from company to pay the rent of their house.
Is HRA given to person who owns a house ?
HRA is one of component of salary can be given to any employee, but if you own a house then you will not get any tax benefit on HRA
What if my employer not paying HRA
You can still get exemption on paid rent in section 80GG
Do I need to submit landlord PAN card ?
If you are paying more than 8333 ₹ in rent per month, then you need to give owner's PAN card
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