How to calculate HRA exemption – Tax Savings

house rent allowance exemption calculation

If you are looking for an automatic calculator, we have prepared HRA Exemption Calculator for you

 

 

House Rent Allowance paid/due to an Individual assessee by his employer is exempt to the extent of the least of the following 3 figures:

 

i) Excess of rent paid over 10% of Salary due for the relevant period. 

let us write that statement in equation form: (Rent Paid) Less (10% * Salary)

where Salary = Basic Salary+DA ( if terms of employment for the same) + Commission as a percentage of turnover achieved by the employee

ii)

a) (50% * Salary due) If the house is in any of the following 4 metropolitan cities:

a. New Delhi

b. Kolkata

c. Chennai

d. Mumbai

b) (40% * Salary due) if the house is in any other place other than above mentioned cities

(where Salary = Basic Salary+DA ( if terms of employment for the same) + Commission as a percentage of turnover achieved by the employee)

iii) Actual allowance received for the relevant period

 

(Important Note: HRA exemption is not available for individuals who reside in his/her own house or in a house for which he does not pay any rent)

Dilip Kumar

+Dilip Kumar (Author and Editor of The Tax Info) is a CA Student from Hyderabad, Loves Blogging on Tax related matter.

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