HRA Exemption Calculator

HRA (House Rent Allowance) exemption under Section 10(13A) is the minimum of three conditions: (1) Actual HRA received from your employer, (2) Rent paid minus 10% of basic salary, (3) 50% of basic salary if you live in a metro city (Delhi, Mumbai, Kolkata, Chennai) or 40% of basic salary for non-metro cities. This minimum amount is tax-free. Any HRA received above the exemption is added to your taxable income.

No. HRA exemption is not available if you opt for the New Tax Regime (introduced in Budget 2020, revised in Budget 2023 and 2025). The New Regime offers a higher standard deduction of ₹75,000 (FY 2025-26) and a 87A rebate up to ₹12 lakh taxable income, but you cannot claim HRA, 80C, or 80D deductions. If you pay high rent, the Old Regime with HRA exemption may save more tax for you.

To claim your full HRA as exemption, your rent minus 10% of basic salary must be at least equal to your annual HRA. So the minimum monthly rent = (Annual HRA + 10% × Annual Basic) ÷ 12. For example, if your monthly basic is ₹50,000 and monthly HRA is ₹20,000, minimum rent = (₹2,40,000 + ₹60,000) ÷ 12 = ₹25,000 per month. Our Rent Optimiser section shows this amount automatically.

If your monthly rent exceeds ₹1 lakh (₹12 lakh per year), you are legally required to collect the PAN card details of your landlord and submit them to your employer in Form 12BB. If the landlord refuses to provide PAN, your employer is required to deduct TDS on the HRA component. The Income Tax Department can disallow your HRA exemption claim if PAN details are missing for rent above this threshold.

No. HRA exemption under Section 10(13A) is only available if your employer pays you HRA as a component of your salary. If your salary structure does not include HRA, you cannot claim this exemption. However, you may be eligible for deduction under Section 80GG if you pay rent and neither you nor your spouse own a residential property in the same city. Section 80GG allows a deduction of the lower of: ₹5,000/month, 25% of total income, or actual rent minus 10% of total income.

Yes, you can claim HRA exemption by paying rent to your parents, provided the rent agreement is genuine and your parents declare the rent received as income in their own ITR. The rent should be reasonable and supported by a proper rent agreement and rent receipts. This is a legal tax-saving strategy but requires proper documentation. Paying rent to your spouse is not allowed as it may be deemed a sham transaction by tax authorities.

Rent receipts are mandatory when your annual rent exceeds ₹1 lakh (i.e., monthly rent over ₹8,333). For rent below this threshold, your employer may accept a self-declaration. However, it is good practice to always maintain rent receipts. Receipts should include: date, amount paid, property address, name and signature of landlord, and a revenue stamp if payment is in cash (for amounts above ₹5,000). Revenue stamps are not required for digital payments.

Under the New Tax Regime for FY 2025-26 (Budget 2025), individuals with taxable income up to ₹12,00,000 get a full tax rebate under Section 87A of up to ₹60,000. This effectively means zero tax for salary up to approximately ₹12,75,000 (after standard deduction of ₹75,000). Marginal relief is available for incomes between ₹12 lakh and ₹12.75 lakh, ensuring you don't pay more tax than your income above ₹12 lakh. Under the Old Regime, the 87A rebate applies to taxable income up to ₹5 lakh, with a maximum rebate of ₹12,500.

HRA exemption under Section 10(13A) applies only to salaried employees who receive HRA as part of their salary. Section 80GG is for individuals who do not receive HRA — typically self-employed professionals or salaried employees whose salary structure does not include HRA. Under 80GG, the deduction is the minimum of: ₹5,000 per month (₹60,000 per year), 25% of total adjusted gross income, or actual rent paid minus 10% of adjusted gross income. You must not own any residential property in the city where you work to claim 80GG.

If you pay significant rent in a metro city and receive HRA, the Old Regime is often better because the HRA exemption (50% of basic for metro cities) can be substantial. For example, if your monthly basic is ₹80,000 and HRA is ₹32,000, your annual HRA exemption could be up to ₹3.84 lakh, saving up to ₹1.15 lakh in taxes. The New Regime only gives ₹75,000 standard deduction with no HRA benefit. Use our calculator to compare both regimes with your actual numbers.

Yes, you can claim both HRA exemption and home loan interest deduction under Section 24(b) simultaneously, but only if you can justify why you are paying rent despite owning a house. This is commonly allowed when: (1) your owned house is in a different city from where you work, (2) you have rented out your owned property, or (3) the owned property is under construction. If you live in your own house, you cannot claim HRA. The Income Tax Department may scrutinise cases where both are claimed in the same city.

Submit Form 12BB to your employer at the beginning of the financial year (April) or before your employer finalises TDS deductions. Form 12BB requires: name and address of your landlord, monthly rent amount, PAN of landlord (if annual rent exceeds ₹1 lakh), and a declaration that the rent is actually paid. Attach rent receipts as proof. Your employer will then adjust your TDS accordingly and reflect the HRA exemption in your Form 16. If you miss submitting it, you can still claim the refund while filing your ITR.