📐 Formula Used
HRA Exemption = MIN of: (a) Actual HRA received (b) 50%/40% of Basic Salary (metro/non-metro) (c) Annual Rent Paid – 10% of Annual Basic Salary
Frequently Asked Questions
How is HRA exemption calculated?
HRA exemption = Minimum of: (a) Actual HRA received, (b) 50% of Basic Salary for metro / 40% for non-metro, (c) Actual rent paid minus 10% of Basic Salary.
Which cities are considered metro for HRA?
Delhi, Mumbai, Kolkata, and Chennai are considered metro cities for HRA exemption. Bangalore, Hyderabad, Pune etc. are non-metro (40% limit).
What if I don't pay rent?
If you do not pay rent, the third condition (Rent paid – 10% Basic) will be negative or zero, making the entire HRA taxable.
Is HRA available in the new tax regime?
No. HRA exemption is not available under the new tax regime. It is only claimable under the old tax regime.