How to calculate the HRA Exemption in Income Tax U/s 10(13A)

The exemption of House Rent Allowance is computed as the following manners U/s 10
(13A)
  • The actual amount of HRA received by the employee from his/her employer
  • 50% of the Salary for individuals residing in Metro Cities (Delhi, Mumbai, Chennai or Kolkata)
  • and 40% other Cities.
  • Rent paid in excess of 10% of Salary (Basic Pay + D.A.)[Grade pay also include in case of Govt employee]
For an Example:-
For Kolkata City - [Metro City]
  • Basic Pay Rs. 3,00,000/- P.A.
  • D.A. Received Rs. 60,000/- P.A.
  • House Rent Received Rs. 2,40,000/- P.A.
  • House Rent Paid by the employee Rs. 1,20,000/- P.A.
  • Hence the Calculation will be as follows :-
  • The Actual H.R.A. Received Rs. 2,40,,000/-
  • 50% of the salary [Basic Pay + D.A.] = 1,80,000/- [ For Metro City]
  • Excess of rent paid over 10% of salary Rs. 1,20,000 -( 10% of Rs.3,60,000[B.pay + D.A.]            =Rs. 84,000
Here is the HRA exemption will be entitled Rs. 1,20,000 -36,000 = 84000/- Relief 
And Rs. 1,56,000  will be Chargeable to Income Tax.