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TDS (Tax Deducted at Source) Calculator
TDS is a type of tax that the payer deducts when making a payment to someone. It is a method of deducting advance tax from different income sources, such as salary, rent, commissions, interest, professional fees, etc. Our TDS calculator will help you to calculate the TDS amount in a few simple steps.
How much of my HRA is exempt from tax?
The entire HRA received is not always fully exempt from tax. The least of the following three will be taken to exempt from tax:
HRA received from your employer
Actual rent paid minus 10% of salary
50% of basic salary for those living in metro cities
40% of basic salary for those living in non-metro cities
The remainder of your HRA is added back to your taxable salary. Our calculator can easily help you figure out your HRA exemption.
For example, let's consider the following scenario:
- Raghu lives in Mumbai
- He receives a HRA of Rs 1 lakh from his employer.
- His basic salary per month is Rs 50,000.
- Further, he has taken up an accomodation for which he pays a monthly rent of Rs 15,000.
- What is the quantum of HRA exemption he can claim?
| Sl. No. | Head | Calculation | Amount |
|---|---|---|---|
| 1 | Actual HRA received from employer | 100000 | |
| 2 | Actual Rent Paid (-) 10% of salary | (15000*12) - 10% (50000*12) | 120000 |
| 3 | 50% of Basic Salary | 50% (50000*12) | 300000 |
| Least of the above | 100000 | ||
Hence, Raghu would be eligible for a HRA exemption of Rs 1 Lakh.
