HRA Exemption Calculator
Calculate exempt and taxable HRA for metro and non-metro cities using the standard least-of-three rule followed for salaried tax planning in India.
Calculate HRA Exemption
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HRA exemption formula
HRA exemption is the least of actual HRA received, rent paid minus 10% of salary, or 50% of salary for metro cities and 40% for non-metro cities.
Exempt HRA = Least of Actual HRA, Rent − 10% Salary, or 50%/40% of Salary
This simplified version uses annual basic salary as the salary base, which is enough for most first-pass tax comparisons.
FAQ
Does metro city make a difference?
Yes. Metro cities use 50% of salary as the city-based cap, while non-metro cities use 40%.
Why can part of HRA still be taxable?
Because only the least eligible amount becomes exempt. The balance HRA is treated as taxable salary.