May 22, 2009

HRA Tax Calculator

I’ve already dealt with the subject of HRA tax exemption quite extensively in my earlier posts – How to Calculate HRA Tax Exemption, HRA FAQs & Tips, and Claiming HRA along with Home Loan Tax Benefits.

However, I’ve received a few requests to develop a HRA Tax Calculator in excel to make it easier for a layman to understand and calculate. So, here’s a HRA tax calculator.

You need to input the following information for calculating taxable and exempt portion of the HRA:

1. Basic Pay + DA (if any) p.m.
2. HRA received p.m.
3. Rent paid p.m.
4. City of Residence (Enter "M" for Metro & "N" for Non-Metro)

However, it is very rare that all the four variables remain constant during the entire financial year. There can be increase in the basic pay and HRA received (due to annual increments or change of job); city of residence and rent paid might also change. As already pointed out in HRA FAQs, when there is change in any of the four factors, HRA tax exemption is to be computed on monthly basis.

Thus, I’ve prepared two HRA tax calculators. The first HRA calculator is meant for calculating HRA tax exemption when all the four parameters remain same through out the financial year. Second HRA calculator is to be used if there is a change in any of the four variables. In case you still need any clarification, please feel free to ask.

Also see:

1. Know your effective tax rate

2. How to calculate your income tax liability

3. How to calculate HRA tax exemption

4. HRA - FAQs & Tips

5. Income tax calculator FY 09-10

6. How to claim HRA alongwith home loan tax benefits

No comments:

Post a Comment

You’re welcome to post a comment if you’d like to air your views, or if you’ve any further question to ask, but please stick to the topic and don’t forget to write your name.