HRA Calculator

How HRA is Calculated in India:

HRA (House Rent Allowance) is a component of the salary that employees receive from their employers to meet the cost of living in rented accommodation. The calculation of HRA is based on the following factors:

• The actual rent paid by the employee
• The city in which the employee resides (metro city or non-metro city)
• The basic salary of the employee
• The HRA percentage provided by the employer

The HRA amount is calculated as the minimum of the following three components:

1. The actual rent paid minus 10% of the basic salary
2. 50% of the basic salary (for metro cities) or 40% of the basic salary (for non-metro cities)
3. The actual HRA received from the employer

Employees can claim tax benefits on HRA under Section 10(13A) of the Income Tax Act, subject to certain conditions and limitations.