ExpressITR || House Rent Allowance (HRA) Calculation

What is House Rent Allowance (HRA)?
House Rent Allowance (HRA) is a component of your salary provided by your employer to help you cover the cost of rented accommodation.

You can claim HRA exemption only if you are residing in a rented house.

HRA Exemption Calculation Process
The HRA exemption is calculated as the least of the following three amounts:

1. Actual HRA received from the employer.
   
2. Actual Rent Paid (-) 10% of Basic Salary + DA (Dearness Allowance).
   
3. 50% of Basic Salary for those living in metro cities or 40% of Basic Salary for those living in non-metro cities.
   

Metro cities for the purpose of HRA calculation include: Delhi, Mumbai, Kolkata, and Chennai.

Example Calculation

1. Actual HRA received from the employer: Rs. 120,000
   
2. Actual Rent Paid: Rs. 144,000
   
3. Basic Salary: Rs. 720,000
   
4. DA (Dearness Allowance): Rs. 162,000
   

Calculation:

1. Actual HRA received from the employer: Rs. 120,000
   
2. Actual Rent Paid (-) 10% of Basic Salary + DA:
   144,000−(10%×(720,000+162,000))=144,000−88,200=55,800
3. 50% of Basic Salary (for metro cities): Rs. 360,000

HRA Exemption:

The least of the above three amounts is Rs. 55,800.

Steps in Express ITR:

1. Enter Salary Details: Input HRA received, DA, and other salary components in the relevant section.
   

      

1. Input Rent Paid Details: Under the "Overall Exemptions & Deductions" section, navigate to the House Rent Allowance subsection and input the rent paid.
   
2. Metro City Option: Select the metro city option if applicable.
   

      

The result will show an HRA exemption of Rs. 55,800.

      

Hope this is helpful!

• Related Articles

• House Rent Allowance (HRA) Calculation

  WHAT IS HRA ? House Rent Allowance or HRA is a part of the salary provided by an employer to his employee for his rented accommodation.  It forms part of the salary paid by the employer to their employee. How is Exemption on HRA calculated ? ...

• ExpressITR || 80CCD(2) Employer's Contribution to NPS Deduction Calculation

  80CCD(2) Employer's Contribution to NPS Deduction Under Section 80CCD(2), a deduction is available for the employer's contribution to the National Pension System (NPS). Employers can contribute to NPS in addition to contributions made to the Public ...

• ExpressITR || Salary Income Data Feeding

  Salary Income Entry Process in Express ITR To enter Salary Income in Express ITR, follow these steps: Step 1: Access ITR Summary Open the client profile within Express ITR. In the ITR Summary section, select Return Flow to proceed. Step 2: Open ...

• ExpressITR || Exemption u/s 10(10): cannot exceed income offered under the head Salary u/s 17(1) under sub head

  While filing the return, errors may occur during JSON generation. To resolve these errors, follow the steps below: Step 1: Click on the error message link. You will be redirected to the Salary Income section. Step 2: Enter the allowances received ...

• ExpressITR || 80GG Deductions in Respect of Rent Paid

  What is Section 80GG? Section 80GG of the Income Tax Act in India provides deductions for house rent paid by individuals who do not receive House Rent Allowance (HRA) as part of their salary. Eligibility for Section 80GG Deduction Applicability: ...