How this calculation works
Estimate the exempt and taxable portions of annual HRA by comparing three limits, rather than treating all rent paid as exempt income. This form uses the entered annual basic-salary amount as its salary base. It does not calculate final income tax or determine whether HRA exemption is available under your selected tax regime.
Worked example
This example uses illustrative inputs. Your current result is shown above.
Enter annual basic salary ₹6,00,000, HRA ₹3,00,000, rent ₹2,40,000 and select non-metro. The limits are ₹3,00,000, ₹1,80,000 (rent less ₹60,000), and ₹2,40,000 (40% of salary). Exemption is the lowest, ₹1,80,000; taxable HRA is ₹1,20,000.
Assumptions and limits
- All three monetary inputs cover the same annual period.
- The metro option represents Delhi, Mumbai, Kolkata or Chennai for this HRA calculation, not every city commonly called a metro.
- The statutory salary definition can include qualifying DA and turnover-based commission; this simplified basic-salary field does not obtain those components separately.
Questions people ask
Does the exemption equal the tax I save?
No. Exemption reduces eligible taxable income. Its effect on tax depends on the applicable regime, other income, deductions and tax rates.
Why is exemption zero when my rent is low?
The rent-minus-10%-of-salary limit can be zero or negative. The final exemption is floored at zero; it cannot create a negative taxable HRA amount.
Can this handle changing salary or cities during the year?
Not as separate periods. If the relevant circumstances change, a period-by-period calculation may be needed instead of treating one city percentage and salary base as applicable throughout.