Are you claiming your full HRA?

House Rent Allowance (HRA) is one of the biggest tax-saving components in your salary slip, yet most employees get the calculation wrong.

Many assume: "If I pay ₹20,000 rent, my entire HRA is tax-free." False.

The Income Tax Department uses a specific logic called the "Least of Three" rule to decide how much tax exemption you get.

The 3 Golden Rules

Your HRA exemption is the lowest of these three values:

1. Actual HRA Received: The amount mentioned in your salary slip.
2. 50% of Basic Salary: (Or 40% if you live in a non-metro city).
3. Rent Paid minus 10% of Basic Salary: This is where most people lose out.

Example: The "Rent - 10%" Trap

If your Basic Salary is ₹50,000 and you pay ₹8,000 rent:

• 10% of Basic = ₹5,000.
• Rent - 10% = ₹8,000 - ₹5,000 = ₹3,000.

Even if your HRA is ₹20,000, you will only get an exemption of ₹3,000. The remaining ₹17,000 becomes taxable!

Stop Guessing

Don't do this math on paper. Use our calculator to see exactly how much rent you need to pay to maximize your saving.

👉 Calculate Your HRA Exemption Now