House Rent Allowance calculator
House Rent Allowance calculator
HRA on the notified city-class percentages, and the exemption ceiling most salaried readers actually care about.
How this is calculated
HRA = basic x class percentage. The exemption under the old regime is the least of the HRA received, rent paid minus ten per cent of basic, and fifty per cent of basic in a metro or forty per cent elsewhere.
- The new tax regime does not allow an HRA exemption at all, so the exemption line matters only if you file under the old one.
- City classification is notified by your department, not chosen by you.
Rates this tool uses
| House Rent Allowance, as a share of basic pay | 30% / 20% / 10% | from 1 January 2024source |
|---|
1 rate is shown above, with the date it took effect and, where one was read, the source it came from. A rate that has not been verified is left out and the field stays blank for you to fill in. If a document disagrees with a figure here, the document is right and this table is out of date.
House rent allowance is a percentage of basic fixed by the class of the city you are posted in. The exemption is a different calculation, and the two are constantly confused.
Allowance and exemption are separate
The allowance is what your employer pays, as a percentage of basic under the central rules. The exemption is what the Income Tax Act leaves out of your taxable income, assessed by the least-of-three test under the old regime: the HRA actually received, the rent paid in excess of ten per cent of basic, and fifty per cent of basic in the four metros or forty per cent elsewhere. Whichever is smallest is the exempt amount and the balance is taxed as salary.
The new tax regime gives no HRA exemption at all, so a reader who has moved to the default regime will pay tax on the entire allowance and the exemption line on this page does not apply.
Proof
Where the rent exceeds a named threshold, employers require the landlord’s name and address in the declaration. A rent receipt is not the same as a lease, and a rent paid to a spouse or parent is open to challenge. The exemption claimed in a return has to survive a scrutiny that looks at the money trail, not the receipt book.
Questions readers ask
I live in own accommodation. Do I still get HRA?
The allowance is attached to the posting, so it is drawn whether or not rent is paid — and where no rent is paid, the exemption is nil because the rent-minus-ten-per-cent limb comes out at zero or negative. The whole allowance is then taxed.
Can I claim HRA and a home loan deduction together?
Yes, they are different provisions, and one does not cancel the other. Where the accommodation you rent is the same property you own, both claims attract attention.
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