HRA Calculation Summary
| Monthly Basic Salary | ₹25,000 |
| Monthly HRA Received | ₹10,000 |
| Monthly Rent Paid | ₹12,000 |
| City Type | Delhi (Metro) |
Three-Condition HRA Test
HRA exemption = minimum of three conditions (all calculated annually):
| Condition 1: Actual HRA Received | ₹1,20,000 |
| Condition 2: Rent Paid − 10% of Basic | ₹1,14,000 |
| Condition 3: 50% of Basic (Metro) | ₹1,50,000 |
HRA Exemption (Minimum of 3 conditions): ₹1,14,000 annually. Taxable HRA: ₹6,000. Estimated annual tax saving at 30% bracket: ₹35,568.
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Use HRA CalculatorFrequently Asked Questions
How much HRA exemption can I claim with ₹25,000 basic in Delhi?
With ₹25,000 basic salary in Delhi (Metro), your annual HRA exemption is ₹1,14,000 — limited by the 'Rent - 10%' condition. This reduces your taxable income by ₹1,14,000, saving approximately ₹35,568 in tax (at 30% + 4% cess).
What are the three conditions for HRA exemption?
HRA exemption is the MINIMUM of: (1) Actual HRA received from employer — ₹1,20,000/year in your case. (2) Rent paid minus 10% of basic salary — ₹1,14,000/year. (3) 50% of basic salary (Metro city) — ₹1,50,000/year. The winning condition in your case is Rent - 10% at ₹1,14,000.
Can I claim HRA if I pay rent to my parents?
Yes, you can pay rent to parents and claim HRA exemption. Ensure: (1) Parents own the property (2) Rent agreement is in writing (3) Money is actually transferred via bank (4) Parents declare rental income in their ITR. This is legal and commonly practised, especially effective when parents are in a lower tax bracket.
What documents do I need to claim HRA?
Rent receipts for all months (stamped with landlord signature), rent agreement, landlord's PAN if annual rent exceeds ₹1 lakh, and bank transfer proofs. If renting from a non-family member, notarised rent agreement is preferred. Submit these to employer before investment declaration deadline (typically January–February).
Can I claim both HRA and home loan interest deduction?
Yes, if you have a home loan on a different property (e.g., home under construction in your home city but renting in work city). You can claim: HRA exemption on rent paid, Section 24(b) up to ₹2L on home loan interest, and 80C on principal repayment. Old tax regime only — not available in new regime.