House Rent Allowance (HRA) Calculator
Compute your eligible tax-free HRA exemption amount based on your Basic Salary, HRA received, actual rent paid, and city category.
HRA Exemption Insights & Tax Savings
Estimated tax relief from your ₹₹2,50,000 exemption.
📋 1. Landlord PAN Requirement
If your total annual rent paid exceeds ₹1,00,000 (₹8,333/month), submitting your landlord's PAN to your employer is mandatory under income tax rules.
🏡 2. Paying Rent to Parents
You can legally claim HRA exemption by paying rent to your parents if the property is in their name. Ensure you transfer rent via bank transfer, execute a rent agreement, and they report this rental income in their ITR.
🏙️ 3. Metro City Definition
For HRA calculations, only Delhi, Mumbai, Kolkata, and Chennai qualify for the 50% basic salary exemption. All other cities (including Bengaluru, Hyderabad, and Pune) are classified as non-metro (40%).
📑 4. Documentation Checklist
Always preserve signed monthly rent receipts, the formal lease agreement with revenue stamps, and utility/electricity bills as proof for tax assessment scrutiny.
How HRA Exemption is Calculated
Under Section 10(13A) read with Rule 2A of the Income Tax Rules, salaried employees living in rented accommodation can claim tax exemption on their HRA.
The exempt HRA is calculated as the lowest (minimum) among three statutory limits:
- Actual HRA received from your employer.
- 50% of Basic Salary (+ DA) for Metro cities, or 40% for Non-Metro cities.
- Actual rent paid minus 10% of Basic Salary (+ DA).
Metro Cities Defined by Income Tax Dept
For the 50% basic salary exemption criteria, only the following four cities are legally classified as Metros:
All other major IT hubs (Bengaluru, Hyderabad, Pune, Gurugram, Ahmedabad) fall under the 40% non-metro rate.
Frequently Asked Questions (HRA FAQ)
Can I claim HRA exemption under the New Tax Regime?
No. HRA exemption under Section 10(13A) is only available under the Old Tax Regime. Under the New Tax Regime, you receive an enhanced Standard Deduction of ₹75,000 instead.
Can I pay rent to my parents and claim HRA?
Yes, provided the house is legally owned by your parents. You must transfer the rent via bank transfer, maintain rent receipts, and your parents must declare this rental income in their tax returns.
When is landlord's PAN mandatory?
If annual rent paid exceeds ₹1,00,000 (₹8,333/month), furnishing your landlord's Permanent Account Number (PAN) to your employer is mandatory by law.
Can I claim both HRA and Home Loan tax deduction?
Yes, if you own a home in another city (or your owned home is rented out) and you live in a rented house in the city of your employment for genuine work reasons.