House Rent Allowance Online Monthly Calculator

HRA Online Calculator 2023 after 7th CPC

House Rent Allowance (HRA) is a typical part of employee compensation packages in India, designed to help cover the cost of renting a home. The appeal of HRA lies in its status as a tax-exempt allowance, up to a certain limit. Eligibility for HRA stipends hinges on factors such as salary level, city of residence, and rental payment amounts.

In India, HRA allocations are Calculated as a percentage of basic salary and vary based on city. While the actual HRA funds granted also rely on the actual amount of rent paid, the maximum allowance a recipient can receive corresponds to the HRA percentage of their basic salary. Additionally, it is important for employees to note that they can only claim HRA if they are currently renting a residential property and can provide evidence of their rental payments to employers.

What is the meaning of HRA?

Employers provide HRA as a part of the salary to their employees to assist them in covering rental housing expenses. Meeting the requirement of residing in a rented house is necessary to qualify for HRA exemption. Section 10(13A) and Rule 2A of the Income Tax Act, 1961 govern the HRA exemption.

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What is House Rent Allowance in Salary?

The HRA is intended to assist employees in paying for their residential expenses in the city where they are employed. Although it is a component of your salary, a percentage of the HRA is not subject to taxes under Section 10 (13A) of the IT Act of 1961, given particular conditions. Employee HRA allocations are determined by employers based on factors such as earnings, compensation, and location. To guarantee that you get the greatest possible tax advantages allowed under the Income Tax Act, you can speak with your employer.

What is the current rates of HRA?

The HRA rates can be modified based on the Dearness Allowance (DA) percentage. Presently, if one resides in Class X cities, they can receive HRA at 30% of their basic pay, grade pay, military service pay, and NPA as per the recommendation made by the 6th Central Pay Commission. Those residing in Class Y and Class Z cities can avail HRA at 20% and 10%, respectively. On the other hand, if the DA surpasses 25%, then HRA rates will be adjusted to 27%, 18%, and 9% for X, Y, and Z class cities correspondingly. Additionally, the rates will be revised further to 30%, 20%, and 10% when the DA crosses 50%.

What are the benefits of HRA for Govt Employees?

Central Government employees receive House Rent Allowance (HRA) as a vital component of their compensation package. HRA is intended to cover rental housing expenses and is classified into three categories- X, Y, and Z- depending on the city’s classification. Effective July 1st, 2021, HRA rates have been revised to 9% (Z Class), 18% (Y Class), and 27% (X Class) for respective cities. Employers decide a part of an employee’s basic salary which is allocated towards this allowance, with the city where the employee resides factored in. Calculating HRA within the salary is a straightforward procedure. For instance, if an employee has a basic salary of Rs. 49000, their HRA would be 27% (Rs. 13230), 18% (Rs. 8820), and 9% (Rs. 4410), depending on the city they live in.

When will increase HRA to 30 percent?

The House Rent Allowance (HRA) for Central Government Employees underwent revision on July 1, 2021, and is set to be revised again in 2024 once the DA percentage mark of 50% is reached. The condition for the HRA to be raised from 27% to 30% is that the dearness allowance increase reaches a minimum of 50%. According to a memorandum from the Department of Personnel and Training, the HRA will become 30%, 20%, and 10% when the dearness allowance surpasses 50%. Similarly, when the DA exceeds 25%, the HRA will be increased to 27%, 18%, and 9% of Basic Pay in X, Y, and Z cities, respectively, followed by an increase to 30%, 20%, and 10% of Basic Pay in the same cities when the DA reaches 50%.

What is the minimum rate of HRA?

Over 700,000 employees are set to receive advantages from the increased minimum HRA. The modified HRA amounts will be at a minimum of Rs. 5400 for X-class cities, Rs. 3600 for Y-class cities, and Rs. 1800 for Z-class cities. It is important to note that the minimum HRA amount is set at Rs. 1800, which makes up 10% of the smallest basic pay level.

Classification of Cities for HRA after 7th CPC

Classifying cities for HRA after the 7th CPC is based on population records. Indian cities are divided into three categories: X Cities, Y Cities, and Z Cities. You can find the State-wise list of X, Y, and Z class cities in the table below. For HRA purposes, X and Y class cities/towns are eligible for 24% and 16% HRA, respectively. The remaining cities fall under the Z class.

In Andhra Pradesh and Telangana, Hyderabad is categorized as an X city with a 24% HRA. Meanwhile, Vijayawada, Warangal, Greater Visakhapatnam, Guntur, and Nellore are Y cities with a 16% HRA. Guwahati is the only Y city in Assam, while Patna is the only Y city in Bihar.

Chandigarh and S.A.S. Nagar, Mohali are the only two cities in Chandigarh, both of which are classified as Y cities with a 16% HRA. Durg-Bhilai Nagar and Raipur are the two Y cities in Chhattisgarh.

Delhi is the only X city in Delhi, with a 24% HRA. Ahmedabad is the only X city in Gujarat, while Rajkot, Jamnagar, Bhavnagar, Vadodara, and Surat fall under Y cities with a 16% HRA. Faridabad and Gurgaon are Y cities with a 16% HRA in Haryana.

Srinagar and Jammu are Y cities with a 16% HRA in Jammu & Kashmir, while Jamshedpur, Dhanbad, Ranchi, and Bokaro Steel City are Y cities in Jharkhand.

Karnataka has Bangalore/Bengaluru as an X city with a 24% HRA. Belgaum, Hubli-Dharwad, Mangalore, Mysore, and Gulbarga are Y cities with a 16% HRA. Kozhikode, Kochi, Thiruvananthapuram, Thrissur, Malappuram, Kannur, and Kollam are Y cities in Kerala.

Gwalior, Indore, Bhopal, Jabalpur, and Ujjain are Y cities in Madhya Pradesh. Greater Mumbai and Pune are the only X cities in Maharashtra. The other cities, such as Amravati, Nagpur, Aurangabad, Nashik, Bhiwandi, Solapur, Kolhapur, Vasai–Virar City, Malegaon, Nanded-Vaghela, and Sangli are all classified as Y cities with a 16% HRA.

Cuttack, Bhubaneswar, and Raurkela are Y cities in Odisha. Puducherry/Pondicherry is a Y city in Puducherry. Amritsar, Jalandhar, and Ludhiana are Y cities in Punjab.

Bikaner, Jaipur, Jodhpur, Kota, and Ajmer are Y cities in Rajasthan. Chennai is the only X city in Tamil Nadu, while Salem, Tiruppur, Coimbatore, Tiruchirappalli, Madurai, and Erode fall under Y cities with a 16% HRA.

Moradabad, Meerut, Ghaziabad, Aligarh, Agra, Bareilly, Lucknow, Kanpur, Allahabad, Gorakhpur, Varanasi, Saharanpur, Noida, Firozabad, and Jhansi are all Y cities in Uttar Pradesh. Dehradun is the only Y city in Uttarakhand. Kolkata is the only X city in West Bengal, while Asansol, Siliguri, and Durgapur are Y cities with a 16% HRA. Note that Saharanpur was classified as a Y class city with effect from June 2011.

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HRA Exemption from Income Tax

As a salaried employee, you may be interested in learning about how to claim an exemption on your HRA (House Rent Allowance) from Income Tax. Fortunately, under Income Tax Rules 10(13A) and Rule 2A, there are certain criteria that you can use to claim this exemption – this includes the actual HRA received in your salary, 40% or 50% of your salary (Basic Pay + DA) depending on if you live in a metro city or not, and rent paid minus 10% of your salary. It’s important to note that if you live in your own home or do not pay rent, you will not be eligible for this exemption. Don’t worry though, our HRA Exemption Calculator can help you work out the exact amount of exemption you can claim, giving you a tax-free income.

7th Pay Commission New HRA Table

HRA Rates for Pay Matrix Level 1

HRA Rates for Pay Matrix Level 2

HRA Rates for Pay Matrix Level 3

Is HRA taxable?

HRA is taxable according to the provisions of the Income Tax Act 1961.

What is HRA?

HRA stands for House Rent Allowance. It’s a type of allowance provided by the Indian Government to Central Government employees as a part of their salary package.

What is the least percentage of HRA?

The least percentage of HRA is 9% of the employee’s basic salary.