This limit is based on the place you reside in, and is applicable to the following categories:
•An individual who lives in a big city
•An individual who resides in a special economic zoneOnce you’ve determined the applicable HRA exemption limit, you can move on to the next step which is to calculate your HRA deduction. To do this, you’ll need to input your basic salary, the rent that you pay, the HRA exemption limit, and the city you reside in into the HRA deduction calculator. You’ll then get an accurate estimate of the HRA deduction that you can make.
In addition to calculating your HRA deduction, the HRA deduction calculator can also be used to determine the maximum amount of deduction that you can claim. This is because the HRA deduction is capped at 50% of your basic salary, or the amount of rent paid, whichever is lower. The calculator will help you to determine the maximum amount that you can claim as HRA deduction to ensure that you don’t overclaim.
Finally, you can also use the HRA deduction calculator to check if you are eligible for the additional deduction under Section 80GG of the Income Tax Act. This section provides an additional deduction of up to Rs. 5,000 per month for individuals who do not receive HRA from their employers. To check if you are eligible for this additional deduction, you’ll need to input your gross total income into the HRA deduction calculator.