HRA Exemption Calculator
Many companies give House Rent Allowance (HRA) to those who live in rented housing as a way to enhance their employees' well-being. The taxable and tax-exempt components of the HRA offered by your company can both be found using our HRA exemption calculator.
However, the entire allowance will be taxed if you receive HRA but do not reside in rental housing. You can use this HRA calculator to help you calculate how much of an allowance you will receive.
The 7th Pay Commission's recommendations led to major adjustments in India's HRA slabs. There are currently three distinct slabs of cities. The majority of urban areas in Slab X require the use of an HRA exemption calculator. Cities with comparatively lower cost of living are included in Slab Y.
How to use BankBazaar HRA Calculator
You can use the HRA calculator by BankBazaar to calculate the HRA. The steps are given below:
Step 1: Enter major details such as basic salary, dearness allowance, HRA received per annum, & rent paid per annum.
Step 2: In the next step, select whether you reside in a metro city or not.
Step 3: Click on ‘Calculate’.
Step 4: Now, You will be able to view the 'HRA amount exempted' and the 'HRA amount taxable'.
Benefits of using HRA calculator
Using a trustworthy HRA calculator in India has the following main benefits:
- Accurate calculations: The calculator guarantees accuracy and is error-free when used repeatedly.
- Tax exemption claims: It aids in determining the amount of HRA that is subject to a tax exemption.
- Handling variables: When calculating HRA, the calculator takes into consideration all relevant variables.
How much of your HRA is exempted from Tax?
It must be noted that not the entire HRA is exempted from being taxed. HRA will be exempted from being taxed only if the following conditions are met:
- 50% of the basic pay for people who live in big cities
- 40% of the basic income for residents of non-metropolitan areas
- HRA that your employer provided
- Rent paid in whole less 10% of pay
Given below is the illustration to understand how HRA exemption works.
Karishma lives in Bangalore and receives an HRA of Rs.1 lakh from her employer. Apart from that she draws a basic salary of Rs.70,000 per month, and she pays a monthly rent of Rs.20,000. The total HRA she can claim are given in the table below:
Sl. No. | Head | Calculation | Amount |
1 | Actual HRA received from employer | - | Rs.1 lakh |
2 | Actual Rent Paid (-) 10% of salary | (20000*12) - 10% (70000*12) | Rs.1.56 lakh |
3 | 50% of Basic Salary | 50% (70000*12) | Rs.4.2 lakh |
Least of the above | - | - | Rs.1 lakh |
Karishma in this case will be eligible for the HRA exemption of Rs.1 lakh.
How to use the HRA Calculator by Income Tax Department
You can visit the Income Tax Department of India and use the HRA calculator to calculate the HRA. The steps are given below:
- Enter details such as your basic salary, dearness allowance, commission if applicable, HRA received, rent paid, and choosing whether you reside in a metro city or not.
- Once you have entered all the details, click on ‘Calculate’ and you will be able to view the ‘exempted house rent allowance’ and ‘taxable house rent allowance’.
FAQs on HRA Calculator
- Can I use HRA if I pay my parents' rent?
Instead of renting a flat, many salaried people stay in their parents' homes. If you live with your parents and receive a house rent allowance, you can still qualify for an exemption by proving that you pay your parents' rent.
- What should I do if I fail to provide my employer with the rent receipts?
Even if you didn't give your employer your rent receipts during the proof submission period, you can still claim HRA directly on your income tax returns.
- How should I do if my landlord refuses to give me his PAN?
If your yearly rent payment exceeds Rs.1 lakh and you wish to qualify for HRA exemption, you must provide your landlord's PAN. There is, sadly, no way around this need.
- Can I deduct HRA if I'm also deducting home loan interest?
You can, indeed. If you live in a rented home as a homeowner who is making mortgage payments, you may still be eligible for HRA. Both benefits may be used by you to lower your taxable income.
- Can I get a tax break on my HRA if my landlord is an NRI?
You may, however, 30% TDS will apply.
- Which documents substantiate my rent payment?
Rent payments made during the previous fiscal year must be accompanied by receipts. You will need to present financial statements to demonstrate that you have paid rent if you don't have the receipts.
- Can HRA and deduction be used in conjunction with home loans?
You may. The most recent modification to the IT Act makes simultaneous applications possible.
- Is DA considered for determining HRA?
It is, indeed. However, you can calculate it yourself using our HRA calculator.
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