House Rent Allowance (HRA) is best tax saving tools available to employees. With these, you can save up to 50% of your salary if you reside in Metro (40% of your salary if you reside in non-metro).
As per income Tax act, for calculation House rent allowance least of the following is available as deduction :
1.                  Actual HRA received
2.                  50% / 40%(metro / non-metro) of basic ‘salary’
3.                  Rent paid minus 10% of ‘salary’. Basic Salary for this purpose is basic+ DA forming a part+ commission on sale on fixed rate.
Cities Like, Delhi, Mumbai, Chennai, and Kolkata constitutes Metro. All cities other than these are non-Metro. So if you resides in cities like Gurgaon, Faridabad, Bangalore, Hyderabad, Pune, Indore, Chandigarh, Ludhiana, Manesar, Kerala, Goa, Panjim , Diu etc it would constitute as Nonmetro and only 40% deduction will be allowed.

Download Automatic House Rent Exemption Calculator U/s 10(13A)