HRA Calculator: frequently asked questions
Straight answers to the questions people ask most about the HRA Calculator.
How is the HRA exemption calculated?
The exemption is the least of three amounts: the actual HRA you receive, your rent paid minus 10% of basic salary plus D.A., and either 50% of basic plus D.A. for metro cities or 40% for non-metro cities.
Which cities are considered metro?
For HRA purposes, the metro cities are Delhi, Mumbai, Kolkata, and Chennai, where the exemption cap is 50% of basic plus D.A. All other cities use the 40% cap.
What is the rent-minus-10% rule?
One of the three exemption candidates is your rent paid minus 10% of basic salary plus D.A. This ensures you need meaningful rent to qualify for a large exemption.
Do I need to pay rent to claim HRA?
Yes. You must actually pay rent to a landlord. If you live rent-free or own the property, you cannot claim the HRA exemption.
Does the calculator support the old regime only?
HRA exemption is a feature of the old tax regime. Under the new regime, HRA exemption is generally not available, so the calculator applies the old-regime rule.
Verdict
If you were unsure about the HRA Calculator, now you know: it applies the least-of-three rule with the correct metro/non-metro cap and the rent-minus-10% formula under the old regime. Start at HRA Calculator.