Tax
HRA Tax Optimizer
Most salaried people leave HRA tax savings on the table — paying less rent than what would maximise their exemption. This calc finds the optimal rent and shows the extra tax you could save.
Inputs (annual)
Optimisation result
The 3-test rule (Section 10(13A))
HRA exemption = LOWEST of:
- 1. Actual HRA received: ₹4,00,000
- 2. 50% of basic: ₹4,00,000
- 3. Rent − 10% of basic: ₹1,60,000
Sweet spot: rent ≥ HRA + 10% of basic. Beyond that, you pay extra rent without extra tax savings.
FAQs
How much rent should I pay to maximise HRA exemption?
Optimal rent = HRA component + 10% of basic. Beyond this, no extra exemption (you hit the metro/non-metro 50/40% cap or HRA itself). This calculator finds the exact number for your salary.
Can I claim HRA if I live with parents and pay them rent?
Yes — pay rent to parents via bank transfer, get rent receipts, ensure parents declare it as income. Rent should be reasonable for the area. Many tax officers reject if it looks artificial.
Do I need rent receipts for HRA?
Yes for amounts over ₹3,000/month. For annual rent > ₹1L (₹8,333/month), employer also needs landlord PAN. Below ₹3K/month, employer typically doesn't ask for receipts.
Does HRA work in the new tax regime?
No. HRA exemption is available only in the old regime. If you have significant rent + HRA, that may itself be a reason to stay in old regime.
Can I claim both HRA and home loan interest?
Yes — if you live in rented house in one city while owning a home in another (or even same city if reasonable). Home loan interest under Section 24(b) + HRA exemption under Section 10(13A) are independent claims.