HRA Calculator: A Smart Way to Maximize Your Tax Savings On Rent!
Saving July 21, 2025
Siddhi Sharma, CFP®
Money Coach, Lxme } NISM Certified
I keep hearing about HRA and rent agreements during tax season… but how does it all work?”
If you’re a working woman, trying to manage your salary, rent, and taxes, this guide is for you. Whether you’re living independently in a metro or a non-metro city, claiming House Rent Allowance (HRA) the right way can help you save the Maximum amount of taxes if you opted out for the Old Tax Regime.
What Is HRA?
House Rent Allowance (HRA) is the allowance you receive from your employer towards the rent of your house. It forms a part of the salary paid to you by your employer.
How is the Exemption on HRA calculated?
The exemption on HRA is calculated as per 2A of the Income Tax Rules. As per Rule 2A, the least of the following is exempted from salary under Section 10(13A) and does not form part of the taxable income. (This exemption is only available in old Tax Regime)
- Actual HRA received from the employer
- For those living in metro cities: 50% of (Basic salary + Dearness allowance)
- For those living in non-metro cities: 40% of (Basic salary + Dearness allowance)
- Actual rent paid minus 10% of (Basic salary + Dearness allowance)
Since to calculate exactly how much is exempt and how much is taxable, you need to apply specific rules , that’s where our HRA Calculator helps you!
Why This Matters for Women Taxpayers
As a woman, managing rent, expenses, and taxes can be overwhelming. Our HRA Calculator is designed with simplicity and clarity to help women taxpayers.
How to Use the HRA Calculator Sheet :
To Download the Sheet
- Click on File
- Select ‘Make a copy’ or ‘Download’
- Choose Microsoft Excel (.xlsx) format
Important:
- Do not edit any of the highlighted cells (they contain auto-calculations)
To Use the HRA Calculator:
- Enter your annual basic salary
- Enter your annual Dearness Allowance (DA)
- Enter the total HRA received in the financial year
- Enter the total rent paid during the year
- If you are from the Metro City dropdown, select:
- Yes if you live in Delhi, Mumbai, Chennai, or Kolkata
- No for all other cities
- Yes if you live in Delhi, Mumbai, Chennai, or Kolkata
- No need to enter anything else
- The sheet will automatically calculate:
- Exempted HRA
- Taxable HRA
- Exempted HRA
Bonus Tips for Women
- Don’t forget to collect the Rent Agreement and maintain proof of rent payments (bank statements or UPI screenshots).
- Make sure your landlord’s PAN is available.
- If you’re a salaried or self-employed woman not receiving HRA, you can still claim a deduction on rent paid under Section 80GG.
Further read:
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