Hra rules

The HRA Calculator helps salaried employees determine the exempt portion of their House Rent Allowance under tax laws. This tool is particularly useful for those looking to understand how much of their HRA they can legally deduct from their taxable income, depending on their salary structure, rent payments, and city of residence.

Formula of HRA Calculator

1. Determine the Basic Salary (BS):
   • Basic Salary is typically the fixed part of one’s pay, without including bonuses, allowances, or other variables.
2. Calculate 50% or 40% of Basic Salary:
   • For residents in metro cities: 50% of Basic Salary = 0.50 * BS
   • For residents in non-metro cities: 40% of Basic Salary = 0.40 * BS
3. Calculate Actual Rent Paid minus 10% of Basic Salary:
   • Excess Rent Paid = Actual Rent Paid (ARP) – (0.10 * BS)
4. Determine the Actual HRA Received:
   • This figure represents the HRA component received as part of your salary.
5. Calculate the HRA Exemption:
   • HRA Exemption is calculated as the minimum of the following three values:
     • Actual HRA Received
     • 50% (or 40%) of Basic Salary
     • Excess Rent Paid
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