HRA Exemption Calculator
HRA Exemption Breakdown
⚠️ HRA exemption is available only under the Old Tax Regime. Under the New Tax Regime, HRA exemption is not available. Rent receipts must be maintained as proof. If annual rent exceeds Rs.1 lakh, landlord's PAN is required. Consult our team for accurate ITR filing with HRA claims.
How HRA Exemption is Calculated
HRA exemption under Section 10(13A) is the minimum of the following three amounts:
| Condition | Formula |
|---|---|
| 1. Actual HRA received from employer | HRA as per salary slip |
| 2. 50% (metro) or 40% (non-metro) of Basic Salary | 50%/40% × Basic |
| 3. Actual rent paid minus 10% of Basic Salary | Rent Paid − 10% of Basic |
The lowest of the three is your HRA exemption. The remaining HRA is added back to your taxable income.
Frequently Asked Questions
Yes — you can pay rent to your parents and claim HRA exemption, provided: (1) The property is genuinely owned by the parent(s), (2) A proper rent agreement exists, (3) Rent is actually paid (bank transfer recommended), (4) Your parent declares the rent as income in their ITR. This is a legitimate tax-saving strategy — many families use it legally. The parent can claim standard deduction of 30% on rental income. Consult our advocates for proper documentation.
Yes — you can claim both if: You own a house in City A (claiming home loan interest under Section 24), while working and renting in City B (claiming HRA). The Income Tax Department has clarified this is allowed if you can demonstrate you are not able to use the self-owned property due to employment in another city. Both deductions cannot be claimed for the same city/same property scenario.
No — Pondicherry (Puducherry) is not classified as a metro city for HRA purposes. Metro cities are only Delhi, Mumbai (Bombay), Kolkata (Calcutta), and Chennai (Madras). For employees living in Pondicherry, the HRA exemption condition 2 applies at 40% of Basic Salary (non-metro rate), not 50%. All other cities in India including Bengaluru, Hyderabad, Pune, and Ahmedabad are also non-metro for this purpose.
Need a Rent Agreement or ITR Filing Help?
SG Law India drafts registered/notarised rent agreements in Pondicherry and handles ITR filing with HRA claims.