HRA Calculator for House Rent Allowance Exemption

Calculate HRA

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Frequent asked Questions on HRA

1.What is House Rent Allowance (HRA)?

HRA is a special allowance provided by an employer to their employees towards payment of rent for residence of the employee. HRA forms part of salary of the employee

2.How is HRA exemption computed?

HRA exemption is covered u/s 10(13A). HRA granted to employee is exempted to the extent of 'least' of the following.

HRA received from the employer.
Rent paid – 10% of Salary.
40% of Salary other than Metro Cities (50% of Salary in case of Metro Cities i.e., Delhi, Kolkata, Mumbai and Chennai).

3.What is "Salary" for claiming HRA Exemption u/s 10(13A)?

Salary means Basic Salary + Dearness Allowance.

4.I am living in my own house, Can I get HRA Exemption for the notional rent?

No, you cannot claim HRA exemption if you are living in your own house.

Learn More @ Rent Vs Buy - 10 things you must know

5.Can I get HRA exemption if I have a Home Loan?

Yes, you can claim both HRA and Home Loan but you need to prove that the house for which you are paying rent and the house for which you are paying home loan are at different places.

6.I am paying maintenance charges along with rent to my Landlord. Can I claim Maintenance charges also as part of rent?

No, you cannot claim maintenance charges as part of rent to claim HRA exemption. HRA can be claimed only on the rent paid.

Maintenance charges may mean Home Owners Association (HOA) Fee, Apartment / Flat maintenance Fees, Common Area Maintenance (CAM) Charges etc. cannot be included in the rent amount for the purpose of HRA calculation.

7.What are the documents required to claim HRA?

The Taxpayer needs to have Rental Agreement and Rent receipts as proof of evidence to claim HRA exemption. If the rent exceeds Rs 1 lakh, the taxpayer needs to submit the PAN of Landlord to the employer.

However, the PAN of the landlord and the rental receipts are not required at the time of the Income Tax Filing, unless the tax department requested to upload for scrutiny.

8.I am not receiving HRA as part of my Salary. Can I claim HRA?

No. you cannot claim HRA u/s 10(13A) if you are not receiving HRA from your Employer. But you can claim Deduction u/s 80GG for Rent paid.

9.What is the amount of deduction available u/s 80GG?

The taxpayer can claim least of the following as deduction.

Actual rent paid – 10% of total income of assessee.
25% of such total income
Rs. 5000 per month

Note: Total Income means net income after deducting all deduction u/s Chapter VIA but before making any deduction u/s 80GG.

You may refer more about Section 80GG @ Deduction in respect of Rent Paid (80GG)

10.Mr. Ram's Use Case

Use Case: Mr Ram is paying a house rent of Rs 15000 per month in Hyderabad. He has the following components as part of his Salary. How much HRA can he claim u/s 10(13A)?

Salary Details per month:

Basic Pay – 40000
HRA – 12000
Special Allowance – 15000
Conveyance – 1600

Salary Calculation per year:

Total Basic Salary = Rs. 480000
Total HRA = Rs. 144000
Total Rent Paid = Rs. 180000

HRA Calculation:

HRA received from the employer = 144000

Rent paid – 10% of Salary (Basic + DA) = 180000 – 10% (480000) = 180000 – 48000 = 132000

40% of Salary (Basic + DA) = 40% * 360000 = 144000

Summary: Exempted HRA is Rs. 132000 (least of above 3 rules)
Taxable HRA is Rs 12000 (in his case)

11.I am paying rent to an NRI Owner, are there any tax implications that I need to aware of?

When we are paying a rent to an NRI, the tenant needs to deduct the taxes @ 31.2% (30% + 4% of 30% as Education Cess) and pay as a challan to the government, and file the TDS Returns (Form 27Q) with Owner's PAN number. Contact Team EZTax.in for help in preparing and filing your TDS

Irrespective of whether TDS deducted or not, the total rent in the rent receipt or rental agreement should not change.

In the same lines, the total rent declared for the calculation of HRA would not change as well.

12.I am Paying a rent of more than Rs. 50,000 per month, are there any tax implications that I need to aware of?

The TDS need to be deducted at the rate of 5% 2% w.e.f 01^st Oct 2024 (earlier it was 5%) on the total rental value for that year and pay as a challan to the government, and file the TDS Returns (Form 26QC) with Owner's PAN number. Contact Team EZTax.in for help in preparing and filing your TDS

When deducting TDS and paying the challan, the total rental value would not change for the rental agreement or HRA calculation or employer declaration etc.