How To Calculate Hra Exemption With Example

HRA (House Rent Allowance) exemption is a crucial component of your salary, helping you save tax. Understanding how to calculate HRA exemption is vital for maximizing your savings.

1. Enter your basic salary and HRA.
2. Select your location.
3. Click ‘Calculate’.

The HRA exemption calculation formula is:

Least of the following:

• Actual HRA received
• 50% of basic salary (for non-metro cities)
• 40% of basic salary (for metro cities)
• Actual rent paid minus 10% of basic salary

HRA Exemption Limits for Metro Cities

Basic Salary	HRA Exemption Limit

HRA Exemption Limits for Non-Metro Cities

Basic Salary	HRA Exemption Limit

• Keep rent receipts for at least 3 years.
• Claim HRA only if you’re paying rent.
• Use this calculator to optimize your HRA and save more tax.

What if my rent is more than the exemption limit?

You can claim the excess amount under Section 80GG.

Income Tax Department – Official guidelines on HRA exemption.

Taxmann – Detailed guide on HRA exemption calculation.