Income Tax Department of India calculates HRA Exemption on following rules -

Minimun amount among these three -

1. The actual amount allotted by the employer as the HRA.
2. Actual rent paid less 10% of the basic salary.
3. 50% of the basic salary, if the employee is staying in a metro city (40% for a non-metro city).

Currently, as per the Income Tax provisions, only four cities in India (Delhi, Mumbai, Chennai and Kolkata) are considered to be metro cities and are allowed to have 50% of the basic salary as the House Rent Allowance (HRA) , other cities are considered as Non-Metro.


For hassle-free calculation of HRA Exemption this app was developed.

Thanks,

Developer