HRA Exemption India Rent Calculator 2019-20

HRA exemption for tax refund online calculator. Rent receipts required >3000 /month. Landlord PAN needed >1 Lakh/year. Pay rent to parent/wife to save tax.

Written by Anil Gupta
  By Anil Gupta          Updated  1 Aug, 19

  96    


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 link in new window.

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.


Finance
 






   96 Useful Questions & Answers from comments



  1. Anupam Kumar
    Anupam Kumar 1 Aug, 19 at 5:22 am

    I have taken lease in place of hra then can I claim hra exemption or not. My hra will come around 2400.


    • Anil Gupta
      Anil Gupta 1 Aug, 19 at 7:22 am

      You should read my article about

      CLA vs HRA.


  2. su ku
    su ku 24 Jun, 19 at 9:37 am

    My Employer given 50% of basic as HRA component in my CTC structure though the location is a Non- Metro city. Please clarify whether the structure is correct. And they are not ready to change it to 40% of basic. Will it be any problem for employee. Please clarify. Thanks,


    • Anil Gupta
      Anil Gupta 24 Jun, 19 at 12:54 pm

      Structure is correct. Employer can give 50% of basic as HRA even for non-metro city.


  3. 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.


  4. 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.


  5. 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.


  6. 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.


  7. 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


  8. 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


  9. Ritesh Tyagi
    Ritesh Tyagi 14 Jan, 19 at 9:48 am

    Hi,
    I have changed houses and so have multiple owners both get under 1 lakh. Do I still need owners pan card?


    • Anil Gupta
      Anil Gupta 14 Jan, 19 at 10:05 am

      Yes, the 1 lakh is an yearly amount.
      Check with your Employer too if they are okay with not submitting PAN in your case.


  10. Mastan
    Mastan 1 Jul, 18 at 8:30 pm

    Hi Anil,
    My HRA is 15,623 and I live in non metro(bangalore). I pay the rent 10500. Could you please suggest me how much maximum exemption I may get.
    Thanks.


    • Anil Gupta
      Anil Gupta 1 Jul, 18 at 8:50 pm

      How much is your basic salary?
      The HRA rules are dependent on basic salary.


  11. Pramod
    Pramod 20 Jun, 18 at 2:16 am

    Hi Anil,
    I have a query, suppose if I have declared very less HRA (e.g., 3,000 against actual 5,000). Will I be eligible for only maximum 36,000 for the HRA exemption for the above examples you have described.
    Thanks.


    • Anil Gupta
      Anil Gupta 20 Jun, 18 at 7:38 am

      You will get tax exemption only on the least of the amount out of the 3 rules mentioned above. You need your basic salary information to find the actual exemption that you will get.
      You can use this calculator to find it:
      https://apps.am22tech.com/take-home-salary-india/


  12. S
    S 12 Mar, 18 at 1:43 pm

    Hello Anil,
    I am staying in Navi Mumbai on rent paying 24k for 2BHK and planning to buy 1 bHK in same locality. As we ( me wife 2 kids and my parents ) will not fit in BHK I am thinking to continue same rented house and let out newly purchased home to someone. I this case can I claim HRA along with home loan interest benefit┬┐ carry forward upto 8 years.
    PS. My parents stay 6 months here and 6 months hometown.
    Thanks.


    • Anil Gupta
      Anil Gupta 12 Mar, 18 at 2:11 pm

      If you LET-OUT (rent) the purchased home, you can claim everything with no limits as it becomes your commercial property then.
      You can claim any amount of home loan interest deduction from your taxes.


      • S
        S 12 Mar, 18 at 11:54 pm

        Hello Amit, thanks for your reply. As per my understanding new rule says 2L is limit and in case of rented property you can carry forward ramaining losses..
        My only concern is can I still claim both (HRA and loan interest ) as my new property and ranted house are in same area. In case of IT scrutiny can I can raise reason as new property is very small for family of 4/6.

        Thanks


        • Anil Gupta
          Anil Gupta 13 Mar, 18 at 7:13 am

          As I understand, you want to rent out the new property but do NOT want to show the rent as your income.
          In that case, yes, the income tax limit applies for home loan interest.
          But, it would NOT be allowed to claim both Rent and home interest tax rebate, if both of them are in same area.


  13. S
    S 12 Mar, 18 at 1:44 pm

    Hello Anil,
    I am staying in Navi Mumbai on rent paying 24k for 2BHK and planning to buy 1 bHK in same locality. As we ( me wife 2 kids and my parents ) will not fit in BHK I am thinking to continue same rented house and let out newly purchased home to someone. I this case can I claim HRA along with home loan interest benefit┬┐ carry forward upto 8 years.
    PS. My parents stay 6 months here and 6 months hometown.
    Thanks.


    • Anil Gupta
      Anil Gupta 12 Mar, 18 at 2:12 pm

      If you LET-OUT (rent) the purchased home, you can claim everything with no limits as it becomes your commercial property then.
      You can claim any amount of home loan interest deduction from your taxes.


      • S
        S 12 Mar, 18 at 11:55 pm

        Hello Amit, thanks for your reply. As per my understanding new rule says 2L is limit and in case of rented property you can carry forward ramaining losses..
        My only concern is can I still claim both (HRA and loan interest ) as my new property and ranted house are in same area. In case of IT scrutiny can I can raise reason as new property is very small for family of 4/6.

        Thanks


        • Anil Gupta
          Anil Gupta 13 Mar, 18 at 7:14 am

          As I understand, you want to rent out the new property but do NOT want to show the rent as your income.
          In that case, yes, the income tax limit applies for home loan interest.
          But, it would NOT be allowed to claim both Rent and home interest tax rebate, if both of them are in same area.


  14. praas
    praas 19 Feb, 18 at 3:16 am

    Sir, i am living with my parents and i received total HRA of Rs. 85000/- this financial year in my salary. how do i get exemption on HRA.


    • Anil Gupta
      Anil Gupta 19 Feb, 18 at 11:55 am

      You have to submit the ‘rent receipts’ to your employer and they should be able to help you.


  15. Nikke
    Nikke 29 Jan, 18 at 11:54 pm

    Do we need to have landlord’s PAN card details if paid less then 1lakh to individual in one financial year but total paid rent is more than 1lakh
    my CA mentioned that landlord can refuse for PAN card if you are paying him/her less then 1lakh during APR-MAR cycle.


    • Anil Gupta
      Anil Gupta 30 Jan, 18 at 8:58 am

      Landlord PAN card details are not required if total rent paid in a year is less than 1 lakh.


      • Nikke
        Nikke 5 Feb, 18 at 3:49 am

        Thanks Anil for your time.
        In this FY, I paid 65,000 to 1st landlord and 1,04,000 to 2nd landlord. I have PAN card of 2nd landlord and sharing same to my Company.
        but my company is saying that it’s HRA rule and I have to share PAN card of both landlords as total HRA is higher side to 1Lakh otherwise they will consider 2nd landlord specific HRA only.


        • Anil Gupta
          Anil Gupta 5 Feb, 18 at 8:18 am

          You can ask your 1st Landlord’s PAN and if they are not giving it out, I guess you are out of luck.
          Your company is right on their side too as they will get an Audit query if they do not follow the law.

          Ask your 1st landlord by saying that you have already shared their address with your company and they are going to send the details to IT department anyway. If they do not share their PAN card, they might face an inquiry form IT.
          They may share it with you then.


  16. Rahul Ranjith
    Rahul Ranjith 21 Dec, 17 at 11:32 pm

    Hello ,
    I bought a house in Coimbatore and I moved to Cochin now. I pay home loan for the house in coimbatore and rent for house in cochin.
    I pay around 14K as rent in cochin and 35500 as Home loan amount. How much benefits can I avail in this case ?
    Can I avail HRA benefit and home loan benefits as well ? Or is there any maximum cap of 2Lakhs for the HRA and home loan together ?


    • Anil Gupta
      Anil Gupta 22 Dec, 17 at 7:49 am

      HRA does not come under the 2 lakh limit. It is only for Home loan.
      If you are paying both and your own home is more than 50 kms from your work location, you can claim the HRA as well.

      The HRA tax rebate can be calculated using this calculator:
      http://apps.am22tech.com/optimum-rent-for-max-tax-exemption/


      • Rahul Ranjith
        Rahul Ranjith 22 Dec, 17 at 12:29 pm

        Ok. Thanks for reply. But the maximum cap for home loan interest in this case would be 2 lakhs right ?


        • Anil Gupta
          Anil Gupta 22 Dec, 17 at 1:26 pm

          Home loan principal and interest are counted separately than HRA.
          Whatever is the limit for home loan interest, you can get it irrespective of what you claim in HRA.


  17. Vimal Gupta
    Vimal Gupta 18 Jul, 17 at 7:31 am

    HI
    ,
    I am a salaried employee in IT software firm, i worked for 9 month in one
    comp and 3 month in another.I have claimed the HRA in first company for
    9 mnth but did not claimed the same for remaining 4 month in another
    company.

    Can i show the 3 month HRA in my return , if so under which section.


    • Anil Gupta
      Anil Gupta 20 Jul, 17 at 2:39 pm

      I am not sure about how to get the benefit directly in ITR. You should get help from a CA.


  18. suresh
    suresh 12 May, 17 at 8:28 am

    Hi,

    I am living in my own house, and claiming the Home Loan benefits(interest – 2L), principal i dont claim as i have other stuffs. This House is in my NAME only. My wife is not working.

    I was thinking of part payment and close the loan in 2 – 3 years time. But i worry about the loosing the tax benefits of 2L. I was under the impression that, if i own the house and no housing loan i cannot claim the HRA.

    Assume I closed the loan,

    Can i pay the rent to my wife name (PAN, transcations can be shown). ? She is not the IT Player.

    Does she have to file the IT return?. The house needs to be in her name ?

    Thanks
    suresh


    • Anil Gupta
      Anil Gupta 12 May, 17 at 9:13 am

      1. First and foremost, the tax that you save is never going to be more than what you are paying to Bank as an interest. It is our mind block that says to keep paying bank to save on taxes.

      If you look from your own point of view, they both are an expense for you. So, it is always better to minimize the expense as much as possible.

      2. If you pay off your loan, off-course, you will not get the HRA tax benefit, in case you are not paying rent. But, then the tax outgo will only be a marginal amount than the total interest you were paying.

      2A. Take a simple example.
      Lets say you have total loan of Rs 100 and your total yearly income is Rs 200.
      Bank is charging 10% interest and hence you are paying Rs 10 as yearly interest.
      You deduct this Rs 10 from your total income of Rs 200 when you file ITR.

      Assuming, you are in 20% tax bracket, you are liable to pay Rs as 40 tax.
      Now, using Rs 10 (home loan interest) as deduction, you reduce your taxable income to Rs 190.

      Final tax comes out to be Rs. 38 (20% of 190).
      You got Rs 2 discount on total tax, just because you paid Rs 10 as interest to bank.

      In a nutshell, you actually paid (your expense) of Rs 8 extra, just to get a discount of Rs 2 in your tax.
      If you had finished your home loan, you would pay total tax of Rs 40 (20% of 200) instead of Rs. 38.

      So, to save Rs 2 on tax, you are trying to keep home loan active and still shelling out Rs 8 EXTRA from your pocket.
      Remember, both are expenses for you and they are never going to come back into your pocket!!

      Doesn’t it sound funny? All this is because, all the media that you read/listen around, tries to fool us into this. They all want us to keep paying interest to banks.

      3. On your HRA question, anyone can pay rent to spouse (wife) legally and claim HRA.
      But, in your case, the house is in your name. So, if there is an audit by tax officer, you will face issues since your wife does not own it and hence can’t really rent it out to you.



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