HRA Calculator

The New Tax Regime (introduced in 2020, made default in FY 2024-25) trades away most exemptions and deductions for wider tax slabs and a higher standard deduction. HRA, Section 80C investments, home loan interest under Section 24, NPS deductions, LTA, food coupons — none of these reduce taxable income under the New regime. The trade-off is simpler computation and lower headline tax on higher incomes. If your eligible exemptions (HRA + 80C + home loan + others) total more than ~₹3-4 lakh per year, the Old regime usually wins; otherwise the New regime is typically better.

To claim HRA exemption you'll need:

• Rent receipts — typically monthly, signed by the landlord (revenue stamp required if rent > ₹5,000/mo). Most employers ask for these at year-end.
• Rental agreement — a written contract showing the rent amount, the property address, the tenancy period, and both parties' signatures.
• Landlord's PAN — mandatory if your annual rent exceeds ₹1,00,000. If your landlord doesn't have a PAN, a self-declaration from them stating they don't hold one is acceptable.
• Bank statements — proving the rent was actually paid via bank transfer. Recommended (though not legally mandatory) to avoid disputes during scrutiny.

Submit these to your employer's payroll team before the FY closes so the exemption reflects on your Form 16 — otherwise claim it directly while filing your ITR.

Yes — but the rent must actually be paid, and your parents must declare it as rental income on their own tax return. The Income Tax Department has accepted this arrangement in multiple rulings, but it's scrutinised closely. To make it stick:

• Sign a proper rental agreement with your parent (the property owner)
• Pay rent by bank transfer every month — never cash
• Obtain monthly rent receipts
• Ensure your parent files an ITR and declares the rental income (they can claim the standard 30% rent deduction)

This is a legitimate planning option when both you and your parent are in different tax slabs (e.g., you in 30%, parent retired in 0–5%). Consult a Chartered Accountant before structuring this.

If your annual rent is less than 10% of your basic (+ DA), the second formula — "rent minus 10% of basic" — becomes zero or negative. The calculator floors it at zero, which means your HRA exemption becomes ₹0 — the minimum of the three formulas is bound by this second one.

This commonly happens when employees live in low-rent areas or in employer-provided accommodation at a token rent. In those cases, the entire HRA from your employer is added to taxable salary (under both regimes, effectively). If you're in this situation and want to plan tax better, the Old regime offers no advantage from HRA — consider whether the New regime + Section 80C/80D investments give you a better outcome.