Received sum of ₹ from towards the rent of property located at for the period
Revenue stamp
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House Rent Allowance or HRA is a component of salary provided by employers to employees to meet their rental expenses. HRA can be claimed as a tax deduction under the Income Tax Act. The amount of HRA received depends on factors such as the employee's salary, the actual rent paid, and the city of residence. However, the tax exemption on HRA is subject to certain conditions and limitations, such as the actual HRA received, rent paid to exceed 10% of salary, and availability of rent receipts. HRA serves as financial aid for individuals to manage their housing expenses while also providing tax benefits.
There are many portals and services online that will calculate the amount of your HRA tax exemption for you. Online HRA calculators in India are quick and easy ways to compute this tax deduction component. HRA calculators online will ask you to input your salary details and compute your HRA for you. This way, you can avoid mistakes in the HRA formula. TaxFilr's HRA calculator in India is an effective and painless way to calculate your HRA exemption without errors.
ET Money's HRA calculator is the simplest way to compute your HRA exemption. By following simple steps, you can easily find out how much HRA you can claim as an exemption and accurately calculate your income tax liability.
After entering all the information, the calculator will show you the taxable HRA amount and applicable tax on the HRA. Also, it will show the HRA amount exempted from taxation.
HRA calculations are based on several factors, as mentioned above. However, the amount of HRA tax exemption that you can claim is the lowest of the following three provisions:
In point 3, salary means basic salary plus dearness allowance and any commissions you may be paid. No other allowances are taken into consideration for HRA deduction. The way to compute the HRA formula is to calculate the above three and then claim the lowest amount as HRA deduction
To understand the HRA calculation formula better, let us consider an example. Ms. Ishika Gupta works for an MNC in Kolkata. She lives in a rented house, paying ₹10,000 per month. Her salary structure looks like this:
Component |
Amount (INR/ ₹) |
Basic Pay |
30,000 |
HRA |
13,000 |
Allowances |
7,900 |
Provident fund |
3,600 |
Total Salary |
54,500 |
When Ms. Gupta applies the HRA formula, she gets:
The lowest of the three is ₹84,000, which she can claim as an HRA tax exemption. In order to avoid confusion, you can use HRA exemption calculators online to ascertain your HRA deduction.