Determine actual HRA received from employer
Calculate rent paid minus 10% of basic salary plus dearness allowance
Calculate 50% of basic salary plus dearness allowance if living in a metro city
Calculate 40% of basic salary plus dearness allowance if living in a non-metro city
HRA deduction = least of the following:
Actual HRA received
Rent paid minus 10% of basic salary plus dearness allowance
50% of basic salary plus dearness allowance for metro cities
40% of basic salary plus dearness allowance for non-metro cities
Use the applicable minimum amount as the HRA exemption claim