HRA Exemption Calculator
Section 10(13A)

This calculator helps salaried employees determine the amount of House Rent Allowance (HRA) that is exempt from income tax under Section 10(13A) of the Income Tax Act, 1961, read with Rule 2A of the Income Tax Rules, 1962.

If you receive HRA from your employer and pay rent for your accommodation, you can claim a portion of the HRA as tax-exempt. The exempt amount is the least of three conditions prescribed under Rule 2A, which this tool calculates instantly.

Who can use this? Any salaried individual who receives HRA as part of their salary and is opting for the Old Tax Regime. Taxpayers who have opted for the New Tax Regime under Section 115BAC are not eligible to claim HRA exemption.

Section 10(13A) of the Income Tax Act, 1961 exempts from total income any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee, to the extent such allowance does not exceed the amount calculated in accordance with such rule as may be prescribed.

The key conditions for claiming this exemption are:

• The allowance must be specifically granted by the employer as HRA.
• The employee must actually pay rent for residential accommodation occupied by them.
• The accommodation must not be owned by the employee.
• The employee must be under the Old Tax Regime (not Section 115BAC).

The actual amount of exemption is calculated as per Rule 2A of the Income Tax Rules, 1962 — the least of the three conditions mentioned therein.

Rule 2A of the Income Tax Rules, 1962 prescribes the quantum of exemption under Section 10(13A). The amount exempt shall be the least of the following three amounts:

• Condition 1: An amount equal to 50% of salary where residential accommodation is situated in Mumbai, Calcutta, Delhi or Chennai (Metro cities); or 40% of salary in other cities.
• Condition 2: The actual House Rent Allowance received by the employee in respect of the period during which such accommodation is occupied.
• Condition 3: The amount by which rent actually paid exceeds one-tenth (10%) of salary, i.e., Rent Paid − 10% of Salary.

For the purpose of Rule 2A, “Salary” means Basic Salary + Dearness Allowance (if it forms part of retirement benefits) + Commission as a fixed percentage of turnover. It excludes all other allowances and perquisites.

Salary is computed on a due basis, i.e., the salary for the period for which the accommodation was actually occupied and HRA was received, not the full year if the employment was for part of the year.