Skip to main content
Calculator

HRA Tax Calculator

By March 27, 2023June 13th, 2023No Comments3 min read

HRA Exemption Calculator for Salaried Employees

This HRA Exemption Calculator for Salaried Employees will help you to know your HRA exemption amount to be claimed to save income tax.

Using 3 inputs – Basic Salary + DA, HRA amount received and rent you pay, you can easily know the HRA exemption limit applicable to you in order to save income tax.

WHAT IS HRA

  • HRA full form is House Rent Allowance
  • If you are salaried employee, you must be receiving HRA component. You can confirm this from your Salary slip of any month
  • HRA is provided to you so that it helps you pay your rent if you stay in rented accommodation
  • Not all of us stay on rent, so this HRA amount becomes taxable if you do not stay on rent
  • But, if you stay on rent, you can claim HRA exemption to reduce your taxable income which will help save your Income Tax
  • There are certain rules you need to follow along with HRA calculation formula you must use to calculate HRA exemption, because not entire HRA amount can be exempted from taxable income

HRA EXEMPTION CALCULATOR ONLINE

The above HRA Exemption Calculator for Salaried Employees helps you calculate the HRA amount you can claim to save Income Tax. But here are few points you should consider:

  • The HRA calculator would give you accurate results when you provide correct information of your Basic + DA components of your salary, HRA amount received and the rent paid by you, all figures on yearly basis
  • It does not take into account the change in basic salary or rent components in between the financial year
  • If you live in metro city then 50% of basic salary will be considered else 40% will be considered in non-metro city to calculate your HRA exemption amount
  • This HRA calculator gives you a rough idea about the approximate amount you can claim as HRA exemption to save Income Tax.

HOW IS HRA EXEMPTION CALCULATED

The above HRA Exemption Calculator for Salaried Employees can help you calculate your exemption limit easily. But let us understand the working of this calculator:

  • The amount you receive as HRA (HRA full form is House Rent Allowance) is not fully tax exempted
  • The Tax exempt portion should be minimum of the following calculations:
    1. Actual HRA received from employer
    2. 50 percent of the ‘salary’ if the accommodation is in the metro cities (Delhi, Mumbai, Chennai, Kolkata) or else 40 percent for other cities
    3. Excess rent paid annually over 10 percent of the annual ‘salary’

where Salary means “Basic Salary + Dearness Allowance”

  • You can claim full HRA received in #1 only when the number is higher in #2 and #3 calculations above
  • Let’s understand this with the help of examples below

CALCULATION FORMULA

Let’s consider below example of Rent, Basic Salary and HRA:

Nik

Leave a Reply