How to Calculate House Rent Allowance – HRA


House Rent Allowance (HRA) is provided by employer to employee as a part of consolidated Salary or you can say Cost to Company (CTC) to meet rent of accommodation. HRA is exempted up to some extent as per section 10(13A) of the Income Tax Act, 1961 and Rule 2A hence it is necessary to understand that How to Calculate House Rent Allowance – HRA Calculator Download here

Minimum of following three amounts is available as HRA exemption:

1.   Actual House Rent Allowance provided by employer to employee.
2.   House Rent paid in excess of 10% of Salary.
3.   50% of Salary in case House is located in Metro cities (Mumbai, Delhi, Kolkata, Chennai) or 40% in case of any other cities.

Important Points:
1.   Salary is to be taken on due basis for calculating HRA.
2.   Salary for this purpose means basic salary, dearness allowance, if provided in terms of employment and commission as a fixed percentage of turnover.
3.   If employee has not paid rent, no HRA exemption is allowed.
4.   If employee is leaving in his own house or not paying any rent, no HRA exemption is allowed.
5.   Rent Receipt should be duly signed in with one rupee revenue stamp.
6.   Employee should deduct TDS @10% from rent paid to land lord if rent paid  is in excess of Rs. 180,000 during the financial year.
7.Documents needed to claim HRA exemption
    If the HRA you are claiming is less than 3,000 per month, no proof is needed. But if the amount you are claiming is more than 3,000 per month, Employee requires to submit rent receipt to employer with details regarding Name of Land Lord, address of property, period and mode of payment.
8.   You can claim exemption for the rent paid to your parents, provided you actually pay the rent. You should get rent receipts for the same.
9.  Your parents would need to declare this income in their IT returns.
10.  You cannot claim rent paid to your spouse. Either you or your spouse can claim HRA exemption – not both.

HRA Calculator:

Very useful and simple House Rent Allowance (HRA) Calculator to calculate HRA.HRA Calculator Download here