Home Payment Gateway Payment Links Payment Pages Payment Buttons QR Codes Instant Settlement Invoices Smart Collect Subscriptions International Payments Razorpay POS Razorpay TokenHQ Optimizer App Store Payments Mobile App Magic Checkout UPI AutoPay Payment Gateway Payment Links Payment Buttons RazorpayX Source to Pay Payouts Payout Links View Live Demo Current Account Escrow+ Account Forex/FDI Transfers Bank Account Verification Tax Payments Digital Lending 2.0 Razorpay Capital Line of Credit Company Registration Current Accounts Vendor Payments Payroll Partners For Startups & SMEs For Enterprises Pricing Blog Learn Events White papers Customer Stories Developer Docs Integrations API Reference Onboarding APIs SaaS E-commerce Education BFSI Freelance GST Calculator Online TDS Payment GST Number Search GST Search by PAN ROI Calculator CAGR Calculator EBITDA Calculator Raise a request Knowledgebase Chargeback Guides Settlement Guides Product Recommender Razorpay Curlec Razorpay Demo Razorpay Documentation Chargeback Blog

Think there's a better way to do payroll at your company? 

Think there's a better way
to do payroll at your company?

Think there's a better way to do payroll at your company?

If you’d like to use RazorpayX Payroll at your company, connect us to your HR team now!

If you’d like RazorpayX Payroll at
your company, connect us to your HR team!

If you’d like to use RazorpayX Payroll at your company,
connect us to your HR team now!

What is House Rent Allowance (HRA)?

What is House Rent Allowance (HRA)?

HRA is a component of salary given by employers to help employees cover their rented accomodation expenses.

If you provide proof of rental expenses, you may be exempt from paying taxes for the HRA component of your salary.

The amount of HRA received by the employee is decided by the employer and is a part of the employee’s overall salary.

How to calculate HRA exemptions?

How to calculate HRA exemptions?

Limited based on your city: In metro cities (Mumbai, Delhi, Chennai, Kolkata) this limit is 50% of your annual basic salary. In non-metro cities the limit is 40% of your annual basic salary.

To calculate HRA exemption, you need ot consider three factors:

  • HRA you receive: This is the amount your employer gives you as HRA in your salary.

  • Actual rent paid: This is the total rent you pay for your house every year (monthly rent multiplied by 12).

HRA exemption is the LOWEST of these three amounts.

HRA Calculation Example

HRA Calculation Example

Let's say Diya lives in Bangalore and earns a basic salary of Rs 23,000. Her employer gives her an HRA of Rs 15,000 per month. She pays a monthly rent of Rs 12,000.

The three components that she will have to calculate are:

  • HRA from employer: Rs. 15,000 x 12 months = Rs. 1,80,000 per year.

  • Actual rent paid: Rs. 12,000 x 12 months = Rs. 1,44,000 per year.

  • Limit for non-metro city: 40% of Rs. 23,000 x 12 months = Rs. (40/100 * 23,000 * 12) = Rs. 1,10,400 per year.

The lowest amount among these components is Rs 1,10,400 - the city limit.

Diya can claim an HRA exemption of Rs. 1,10,400 and the remaining Rs. 69,600 (Rs. 1,80,000 - Rs. 1,10,400) of her HRA will be added to taxable income.

What is an HRA Calculator?

What is an HRA Calculator?

A HRA Calculator is a quick and easy way to know how much of your HRA is tax-exempt.

Calculating your HRA can be a cumbersome, error-prone process, and so it is best to make use of online HRA calculators.

Online calculators line RazorpayX’s HRA Calculator will ask you for basic information about your salary, rent paid, city of residence and compute your HRA in seconds.

How to use the HRA Calculator?

How to use the HRA Calculator?

The RazorpayX HRA Calculator is the easiest way to calculate your tax-exempt House Rent Allowance.

Step 1: Fill in your monthly basic salary
Step 2: If you are a central government employee, fill in the amount you receive as dearness allowance.
Step 3: If you live in one of the metro cities, your HRA exemption is calculated at 50%. For a non-metro, it’s 40%.
Step 4: Enter the total amount of HRA received from your employer as part of your salary.
Step 5: Enter the total amount of rent paid monthly.

Your HRA split is calculated automatically by the calculator.

Special Cases of HRA Exemption

Special Cases of HRA Exemption

Rent paid to family members:

You can still claim HRA on rent paid to family members as long as you can provide proof of rental payments. You may also need to provide the rental agreement, rental receipts, etc. You can not claim HRA exemption if you own the house.

Rent shared with spouse:

When rent is shared with a spouse, the employee can claim HRA for the amount mentioned on the rental receipts. If you are able to provide proof of payment of each spouse's individual contribution, you may be able to claim HRA for only your individual contributions towards rent. However, it's important to ensure that the rental receipts are legitimate and not duplicated to avoid any complications.

Employees without HRA:

HRA is a benefit provided by employers as part of the employee's salary. It is provided at the discretion of the employer, which means some employees may not receive this benefit. In such cases, you can still claim HRA under Section 80GG of the Income Tax Act after filing Form 10BA.

Automate HRA Calculation

Save money, time and manpower on tedious manual HRA calculations with RazorpayX Payroll.

Automatically calculate HRA exemption and taxable income based on employee location and PAN details.

Accurate HRA calculations according to the latest income tax regulations, helping you stay compliant and avoid penalties.

Enable faster and transparent HRA reimbursements with self-serve modules for employees to submit proofs and claims directly.

Frequently Asked Questions

Frequently Asked Questions

Frequently Asked Questions

How do I claim 100% HRA?

You can claim 100% of your HRA as tax exempt if certain conditions are met. Unless the rent paid is very high relative to your salary, claiming 100% of your HRA as tax exempt is not possible.

How much HRA am I eligible to receive as part of my salary?

If you live in a metro city (Delhi, Mumbai, Chennai), you are eligible to receive 50% HRA exemption as part of your salary. If you live in a non-metro, you are eligible to receive 40% HRA exemption.

What is the HRA limit?

There isn't a single HRA limit in India. It depends on your employer's policy and your city's classification. For tax exemption, the limit is 50% of basic salary (plus DA) in metros and 40% in non-metro cities, but your employer might offer a different amount. 

What if my rent is more than my HRA?

Is HRA part of 80C?

HRA is not part of 80C. HRA exemptions can be claimed under Section 10(13A) or Section 80GG.

Can I pay rent to my family and claim under HRA?

Paying rent to family for HRA deduction is possible, but certain conditions apply. You need documented rent payments at market rate and your family member must declare it as income. This works only under the old tax system in India. Consult a tax advisor for specifics on your situation.

How do I claim 100% HRA?

You can claim 100% of your HRA as tax exempt if certain conditions are met. Unless the rent paid is very high relative to your salary, claiming 100% of your HRA as tax exempt is not possible.

How much HRA am I eligible to receive as part of my salary?

If you live in a metro city (Delhi, Mumbai, Chennai), you are eligible to receive 50% HRA exemption as part of your salary. If you live in a non-metro, you are eligible to receive 40% HRA exemption.

What is the HRA limit?

There isn't a single HRA limit in India. It depends on your employer's policy and your city's classification. For tax exemption, the limit is 50% of basic salary (plus DA) in metros and 40% in non-metro cities, but your employer might offer a different amount. 

What if my rent is more than my HRA?

Is HRA part of 80C?

HRA is not part of 80C. HRA exemptions can be claimed under Section 10(13A) or Section 80GG.

Can I pay rent to my family and claim under HRA?

Paying rent to family for HRA deduction is possible, but certain conditions apply. You need documented rent payments at market rate and your family member must declare it as income. This works only under the old tax system in India. Consult a tax advisor for specifics on your situation.

How do I claim 100% HRA?

You can claim 100% of your HRA as tax exempt if certain conditions are met. Unless the rent paid is very high relative to your salary, claiming 100% of your HRA as tax exempt is not possible.

How much HRA am I eligible to receive as part of my salary?

If you live in a metro city (Delhi, Mumbai, Chennai), you are eligible to receive 50% HRA exemption as part of your salary. If you live in a non-metro, you are eligible to receive 40% HRA exemption.

What is the HRA limit?

There isn't a single HRA limit in India. It depends on your employer's policy and your city's classification. For tax exemption, the limit is 50% of basic salary (plus DA) in metros and 40% in non-metro cities, but your employer might offer a different amount. 

What if my rent is more than my HRA?

Is HRA part of 80C?

HRA is not part of 80C. HRA exemptions can be claimed under Section 10(13A) or Section 80GG.

Can I pay rent to my family and claim under HRA?

Paying rent to family for HRA deduction is possible, but certain conditions apply. You need documented rent payments at market rate and your family member must declare it as income. This works only under the old tax system in India. Consult a tax advisor for specifics on your situation.

Razorpay is the only payments solution in India that allows businesses to accept, process and disburse payments with its product suite. It gives you access to all payment modes including credit card, debit card, netbanking, UPI and popular wallets including JioMoney, Mobikwik, Airtel Money, FreeCharge, Ola Money and PayZapp.

RazorpayX supercharges your business banking experience, bringing effectiveness, efficiency, and excellence to all financial processes. With RazorpayX, businesses can get access to fully-functional current accounts, supercharge their payouts and automate payroll compliance.


Manage your marketplace, automate bank transfers, collect recurring payments, share invoices with customers and avail working capital loans - all from a single platform. Fast forward your business with Razorpay.

Disclaimer: The RazorpayX powered Current Account and VISA corporate credit card are provided by RBI licensed banks. Your RazorpayX powered current account is provided by our partner banks i.e, ICICI, RBL, Yes bank, in accordance with RBI regulations. RazorpayX itself is not a bank and doesn't hold or claim to hold a banking license.

Razorpay is the only payments solution in India that allows businesses to accept, process and disburse payments with its product suite. It gives you access to all payment modes including credit card, debit card, netbanking, UPI and popular wallets including JioMoney, Mobikwik, Airtel Money, FreeCharge, Ola Money and PayZapp.

RazorpayX supercharges your business banking experience, bringing effectiveness, efficiency, and excellence to all financial processes. With RazorpayX, businesses can get access to fully-functional current accounts, supercharge their payouts and automate payroll compliance.


Manage your marketplace, automate bank transfers, collect recurring payments, share invoices with customers and avail working capital loans - all from a single platform. Fast forward your business with Razorpay.

Disclaimer: The RazorpayX powered Current Account and VISA corporate credit card are provided by RBI licensed banks. Your RazorpayX powered current account is provided by our partner banks i.e, ICICI, RBL, Yes bank, in accordance with RBI regulations. RazorpayX itself is not a bank and doesn't hold or claim to hold a banking license.

Razorpay is the only payments solution in India that allows businesses to accept, process and disburse payments with its product suite. It gives you access to all payment modes including credit card, debit card, netbanking, UPI and popular wallets including JioMoney, Mobikwik, Airtel Money, FreeCharge, Ola Money and PayZapp.

RazorpayX supercharges your business banking experience, bringing effectiveness, efficiency, and excellence to all financial processes. With RazorpayX, businesses can get access to fully-functional current accounts, supercharge their payouts and automate payroll compliance.


Manage your marketplace, automate bank transfers, collect recurring payments, share invoices with customers and avail working capital loans - all from a single platform. Fast forward your business with Razorpay.

Disclaimer: The RazorpayX powered Current Account and VISA corporate credit card are provided by RBI licensed banks. Your RazorpayX powered current account is provided by our partner banks i.e, ICICI, RBL, Yes bank, in accordance with RBI regulations. RazorpayX itself is not a bank and doesn't hold or claim to hold a banking license.