HR & Payroll
House Rent Allowance
HRA
Tax-exempt salary component for rented accommodation, subject to specific calculation rules.
What it means
HRA exemption is the lowest of three values: (1) actual HRA received, (2) 50% of basic in metro cities (40% in non-metros), (3) actual rent paid minus 10% of basic salary. The unused portion of HRA is taxable as part of regular salary.
Metro cities for HRA: Delhi, Mumbai, Kolkata, Chennai. All others are non-metro for HRA purposes (Bangalore, Hyderabad included).
How Easedesk handles House Rent Allowance
Easedesk applies the lowest-of-three HRA exemption rule automatically, distinguishes metro vs non-metro by employee location, and reflects the exemption in the monthly TDS computation and Form 16 Part B.
Related terms
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