House Rent Allowance (HRA) is an allowance which is given to a salaried person for meeting the expenses related to the rent. Any salaried person living in a rented house can claim House Rent Allowance (HRA) exemption u/s 10(13A) of Income Tax Act from his total income. In this way, he can reduce his income tax liability.
The minimum of the following three amounts is exempted
You can use following HRA Calculator to calculate the amount of HRA Exemption Amount in an easy manner.
Note : The values entered in the calculator should be "Annual"
You need to enter following 4 amounts for this purpose
The point to be noted here is that the HRA exemption is allowed to an employee who lives in a rented property, even if he owns a house property in the same city. It is also allowed even if rent is being paid to any family member.