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hra exemption calculation house rent allowance excel examples video

How HRA Exemption is Calculated [Excel Examples]

How HRA exemption is calculated. You basically need to do 3 calculations to reach your HRA exemption amount:

1. Calculate Total HRA received in FY
2. Total rent paid in FY minus 10% of Basic Salary + DA in FY
3. 50% of Basic Salary + DA (metro city), else 40% in case staying in non metro city.
Minimum of above numbers will be considered as HRA exemption amount in the financial year to save income tax by reducing the taxable income.