What does the HRA Calculator do?
The HRA Calculator works out your House Rent Allowance exemption and the taxable part of your HRA under the old tax regime. It applies the standard rule that the exemption is the least of three amounts — the actual HRA received, rent paid minus 10% of basic salary, or a percentage of basic salary that depends on whether you live in a metro or non-metro city.
Common uses
- Salaried employees — know exactly how much of your HRA is tax-free each year
- Rent verification — see how the rent-minus-10% rule limits your exemption when rent is low
- Metro vs non-metro — correctly apply the 50% or 40% cap depending on your city
- Tax planning — reduce your taxable salary before your employer computes TDS
Key features
- Metro & non-metro — applies the 50% cap for metro cities and 40% for non-metro
- Rent-minus-10% rule — computes the exemption from your rent minus 10% of basic salary
- Tax saving estimate — shows the taxable HRA so you know how much remains in your salary
How it works
Enter your basic salary and D.A., the HRA you receive, the rent you pay, and whether your city is metro or non-metro. The tool computes the three candidate exemption amounts — actual HRA, rent minus 10% of basic plus D.A., and 50% (metro) or 40% (non-metro) of basic plus D.A. — and takes the least of them as your exemption. The remainder is the taxable HRA added to your salary.
Verdict
The HRA Calculator applies the correct metro/non-metro rule and rent-minus-10% formula to give you your exact HRA exemption under the old regime — free, private, and instant.