HRA Calculation – House Rent Allowance Calculator 2024 With Examples

How to calculate hra? HRA Calculation you can calculate your house rent allowance in India 2024 with in mutes of time just follow this simple procedure for online calculate your house rent allowance.

HRA Calculation

The HRA is a special allowance offered to the employee if he/she lives in a rented premise. The house rent allowance is considered a component of the taxpayer’s salary, which reduced their liability. These only apply if the employee lives in rented accommodation. In simple terms, HRA is the employer’s amount to employees as part of their monthly salary. The allowance helps employees with tax benefits towards their rent payment every year. However, the amount to allocate the HRA is determined by the employer. Who considers several criteria such as the city of residence and monthly salary?

The HRA is significant to the majority of Indian employees. This is regulated by provision section 10(13A) of the IT Act. The law works for only the salaried employee in India. The law exempts self-employed individuals and salaried employees who live in their own home and don’t pay rent.

HRA Calculation
HRA Calculation

How to decide on HRA?

The HRA amount is determined by the amount of salary one receives. According to the income tax rules, the tax-exempt part of the HRA. It the minimum of:

  • The HRA component of the salary
  • 50% of the basic pay of the employee lives in
    • Delhi
    • Chennai
    • Kolkata
    • Mumbai
  • 40 % if they live in any other city.
  • Actual rent paid less than 10% of the basic salary. 

To calculate the HRA, the salary is calculated as the sum of basic pay, dearness allowances, and all commissions received. For employees without the dearness allowance and commission. The HRA ranges around 40%-50% of their basic salary.

HRA Exemption

Documents required to claim the HRA tax exemptions

  • Individuals paying rent greater than Rs.1 lakh during the financial year. They need to provide a PAN card and a copy of the landlord’s or owner’s details. 
  • Provide information about the receipts of rent paid by the employee. These receipts should include:
    • The date and name of the landlord. 
    • Name of the tenant.
    • The PAN card details of the landlord
    • Duration you have stayed
    • The revenue stamp
    • Address of the rented premises.
    • The signature of the landlord.

You can use the same receipt for three months period. Beyond this, you need more receipts as proof documents.

How to Calculate HRA calculation with examples

The HRA can be calculated as follows, taking an employee living in Delhi. The employee pays rent of Rs. 10,000 per month, which is Rs. 1.2lakh yearly. 

Basic SalaryRs.31000/-
Conveyance AllowanceRs.2000/-
Special AllowanceRs.3000/-
Leave Travel Allowance (LTA)Rs.5000/-
Total EarningsRs.54000/-
HRA calculation with examples

The employee salary gets a reduction of Rs. 2,000/- for PF contribution and professional tax of Rs. 200. The amount is deducted every month from the basic salary. For the above chart, the employee, the tax-exempt for HRA, is the lowest considering his annual salary? 

The Rs. 84,000 is considered as the lowest value. In this case, it’s the tax-exempt of the employee. And the amount he/she can receive as HRA. Any other HRA amount received is taxes according to the income tax department rules.

The employee must keep in mind that the actual rent should be lower than 10% of their basic salary. The employer offers the actual amount as the HRA.

  1. HRA full form

    House Rent Allowance (hra)

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