House Rent Allowance (HRA) is a key component of a salaried person's income. It is paid by employers to help employees meet rental housing expenses. A portion of HRA can be claimed as tax exemption, subject to certain conditions. Calculating HRA exemption manually can be confusing. That's where a HRA Calculator helps. With Paytm's HRA Calculator, you can instantly estimate your HRA exemption and taxable amount and plan your income tax better.
What is an HRA Calculator?
An HRA Calculator is an online tool that helps salaried individuals calculate the tax-exempt portion of their House Rent Allowance. The calculator considers multiple factors such as salary, rent paid, city of residence, and HRA received, and performs the required calculations within seconds.
Details Required for HRA Calculation
To calculate HRA exemption, the following details are required:
- Basic Salary: The fixed part of your salary. It is fully taxable.
- Dearness Allowance (DA): An allowance paid to offset inflation. It is also fully taxable.
- HRA Received: The house rent allowance paid by your employer.
- Rent Paid: The actual rent paid by you during the year.
- City of Residence: Whether you live in a metro or non-metro city.
Metro cities as per Income Tax rules: Delhi, Mumbai, Kolkata, Chennai
How is HRA Exemption Calculated?
HRA exemption is calculated as the lowest of the following three amounts:
- Actual HRA received from the employer
- 50% of salary (Basic + DA) if living in a metro city
40% of salary (Basic + DA) if living in a non-metro city - Rent paid - 10% of salary (Basic + DA)
The lowest value among these three is allowed as HRA tax exemption.
HRA Calculation Example
Let's understand this with an example:
- Basic salary: ₹1,00,000 per month
- Dearness allowance: ₹90,000 per month
- HRA received: ₹30,000 per month
- Rent paid: ₹25,000 per month
- City: Haryana (Non-metro)
Step 1: Annual values
Salary (Basic + DA) = ₹1,90,000 × 12 = ₹22,80,000
Annual HRA received = ₹3,60,000
Annual rent paid = ₹3,00,000
Step 2: Calculate exemption amounts
Actual HRA received = ₹3,60,000
40% of salary = ₹9,12,000
Rent paid - 10% of salary = ₹3,00,000 - ₹2,28,000 = ₹72,000
Step 3: HRA exemption
The lowest amount is ₹72,000, which is the HRA tax exemption.
How to Use Paytm HRA Calculator?
Using Paytm's HRA Calculator is quick and easy:
- Enter Basic Salary
- Enter HRA received
- Enter Rent paid
- Select whether you live in a metro city
- Click on Calculate
The calculator will instantly show:
- HRA exemption amount
- HRA taxable amount
Benefits of Using Paytm HRA Calculator
- Easy and quick to use
- Free and accessible online
- Accurate tax exemption calculation
- Helps plan income tax better
- Saves time and manual effort
Components of a Salary Slip
Income Components
- Basic Salary
- House Rent Allowance (HRA)
- Dearness Allowance (DA)
- Special Allowance
- Conveyance Allowance
- Medical Allowance
Deduction Components
- Employee Provident Fund (EPF)
- Tax Deducted at Source (TDS)
- Professional Tax
Documents Required to Claim HRA
To claim HRA exemption, you may need:
- Rent receipts
- Rent agreement
- Landlord's PAN (mandatory if annual rent exceeds ₹1,00,000)
Rules for Claiming HRA Exemption
- HRA can be claimed only if you live in a rented house
- You cannot claim HRA if you live in your own house
- Exemption is limited to the lowest of the three prescribed limits
- Landlord's PAN is mandatory if annual rent exceeds ₹1,00,000
- If the landlord is an NRI, applicable TDS must be deducted
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