HRA Calculation Tool – India (2025)

How HRA Exemption is Calculated in India

House Rent Allowance (HRA) is an important component of a salaried employee’s income. Under Section 10(13A) of the Income Tax Act, HRA can be claimed as a tax exemption if you live in a rented house and receive HRA from your employer.

You can claim the least of the following three amounts:

• Actual HRA received
• Rent paid – 10% of basic salary
• 50% of basic salary (for metro cities) or 40% (for non-metros)

Metro cities include Delhi, Mumbai, Kolkata, and Chennai. All other cities fall under non-metros. To claim the exemption, rent receipts and proof of residence must be submitted.

Eligibility Criteria for Claiming HRA Exemption

• You must be a salaried employee
• HRA must be part of your salary package
• You should be living in rented accommodation
• You should not own the residential property where you reside

If you’re paying rent to your parents or a relative, you can still claim HRA, provided they show it as rental income and pay taxes accordingly.

HRA vs Home Loan

Interestingly, you can claim HRA and also claim deductions under Section 80C and Section 24 for home loan repayment, provided you meet certain conditions, such as working in a different city from your owned home.

Use the above calculator to find out how much of your HRA is exempt from tax and plan your tax-saving strategy accordingly under the old tax regime.