HRA Exemption India Rent Calculator 2019-20

Written by Anil Gupta
  By Anil Gupta          Updated  16 Jun, 19
  92    


HRA is house rent allowance paid by company to meet your rent expenses. HRA is tax free up-to an amount based on 3 rules defined by Income tax department.

Use this HRA calculator online to find your HRA tax rebate.

HRA Exemption Calculator 2019-20

Open HRA tax exemption calculator in new window.

If you are a salaried professional and living in a rented house, HRA exemption is one of the biggest tax saving option, under Section 10 (13A) of the Income Tax Act.
For self employed , HRA tax deductions under Section 80 GG are available.

Employer does not provide HRA Allowance

You can claim the HRA Income Tax exemption even if your employer does not provide HRA allowance as exempted allowance on ITR (Income tax return).

Calculate the HRA exempted amount using the above calculator and mention that amount on your ITR (Indian Income Tax Return) as ‘Exempted allowances‘.
Your final tax refund will increase based on the exempted HRA amount.

Documents required for HRA

documents required to claim HRA tax exemption include rent receipts if rent per month is greater than 3 thousand rupees per month.

Claim both HRA and Tax Rebate on Home Loan

You can claim both HRA and Home Loan tax exemption as per Income tax rules.

If you have rented a house for yourself and paying home loan EMIs, you can claim income tax exemption for both at the same time.
The owned house should be in a city which is too far to travel daily from your work location like 50+ kms away.

There is no documented Kms limit in the tax laws though but 50+ is considered safe to claim and convince income tax officer.

Can I pay rent to my wife or spouse or parents to claim HRA tax benefit?

You can pay house rent to your wife or parent legally and claim HRA. In the eyes of Income tax, each individual is a separate entity and hence can have his own income.

HRA Exemption Income Tax Rules

The 3 rules of HRA tax exemption (You get least of three):

  1. Actual HRA received during the financial year.
    • 50% of BASIC salary – If residing in METRO city (Only Mumbai, Kolkata, Delhi or Chennai)
    • 40% of BASIC salary – If residing in Non-METRO city
  2. Rent paid in excess of 10% of BASIC salary. i.e. Excess Of Rent = Rent Paid – 10% of Basic

HRA (one of the component of your salary package), is actually defined by your Basic salary in most cases. i.e. it is normally 40% or 50% of your basic salary.

Example:
For basic salary of INR 10,000 per month, your HRA component would be either INR 4000 or INR 5000.
The 40% or 50% factor is dependent on your specific employer policy.

The HRA income tax rebate of either picking 40% or 50% is defined by your residence location METRO status eligibilty.

Paying Rent equal to HRA Allowance?

Paying rent same as HRA allowance will not give you maximum HRA tax exemption as rules are clever.

Basic salary10,000
HRA (50% of Basic Salary)5000
ResidenceMetro City – Delhi
Rent paid/declared5,000 per month

If you are declaring rent of Rs. 5000 per month considering that you are declaring more than your HRA amount i.e. INR 5,000, would not make any difference to final tax exemption, then you are wrong.

Quickly running through the 3 rules would make things clear here.

RuleDescriptionEligible Amount
Rule 1Actual HRA (12 months)60,000 (12*5,000)
Rule 250% of yearly Basic Salary60,000 (50% of 10,000*12)
Rule 3Excess Of Rent = Rent Paid – 10% of Basic48,000 (60,000 – 12,000 [10% of 1,20,000])
Least of the three amount:48,000

If you scan carefully, you are only eligible for Rs. 48,000 as tax deduction even though your yearly HRA and rent-paid (and declared) amount is 60,000.

Income tax officials have designed the rules so cleverly that you will always end up getting the least tax HRA tax rebate if you look at the HRA component alone.

How to get maximum HRA exemption?

The HRA income tax rules are based on basic salary, HRA amount and rent paid/declared. You can’t change basic salary and HRA component. Hence, the idea is if you pay a rent figure which brings the amount in all three rules equivalent to the maximum of three, you would be eligible for maximum tax rebate.

Example: We are just increasing the rent paid amount to Rs. 6,000 keeping basic and HRA same as in above example and re-calculate the 3 rules:

RuleDescriptionEligible Amount
Rule 1Actual HRA (12 months)60,000 (12*5,000)
Rule 250% of yearly Basic Salary60,000 (50% of 10,000*12)
Rule 3Excess Of Rent = Rent Paid – 10% of Basic60,000 (72,000 – 12,000 [10% of 1,20,000])
Least of the three amount:60,000

If you look at the least amount now, it is INR 60,000 which is equal to the maximum of three values too.

Comments, suggestions and queries are most welcome.


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   92 Useful Questions & Answers from comments



  1. Yogendra
    Yogendra 5 Jun, 19 at 12:45 am

    I received 330000 as basic in 2018-19. It is for 4 months 12 days. My monthly basic was 75000. I took a room on rent for 3 months with monthly rent of Rs 14000. I paid Rs 42000 rent for 3 months.
    Can anyone tell how much HRA I have to claim in income tax return

     

    • Anil Gupta
      Anil Gupta 5 Jun, 19 at 12:11 pm

      Please use the calculator given above to find the HRA tax and tax exemption amount.

       

  2. Shivaraj
    Shivaraj 31 May, 19 at 2:01 am

    Hi Anil gupta,
    I am getting 6000rs deducted as HRA exemption,

    What it means and do I get that amount back?

     

    • Anil Gupta
      Anil Gupta 31 May, 19 at 10:36 am

      Your question is not clear about your situation. Please share information as to why HRA is getting deducted? It should be paid to you as salary and not deducted.

       

  3. Aakash Pune
    Aakash Pune 16 Mar, 19 at 6:08 am

    thanks got my answer through the comments posted

     

    • Anil Gupta
      Anil Gupta 16 Mar, 19 at 11:48 am

      Please use the calculator given above to find out how much tax exemption you can get.

       

  4. Lata
    Lata 4 Mar, 19 at 4:09 am

    sir I hv shifted in rental home on 15 may 2018.I am working in govt sector.Received HRA 13656 per month and paying rent rs 27000 pm.Now at the end of financial year how could I calculate HRA rebate.plss clear if anyone shifted home in the mid of the year like me..

     

    • Anil Gupta
      Anil Gupta 4 Mar, 19 at 9:03 am

      You can use the calculator given above to calculate your HRA tax exemption.

       

  5. Indu
    Indu 26 Feb, 19 at 1:08 am

    Hi
    My employer is giving me 1800 monthly as H. R. A. DO I need to submit receipt for the hra tax exemption??
    If no please provide the relevant document in support

     

  6. SHYAM SUNDER
    SHYAM SUNDER 28 Jan, 19 at 8:52 pm

    hi
    can i have paid House rent to wife/parrent what are the rule position of exemption of income tax rebate on income tax, please tell me

     


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