About the hra calculator
House rent allowance is not exempt because you paid rent. It is exempt up to the least of three separate figures, and which of the three binds is the whole behaviour of the rule. People consistently expect their exemption to be the rent they paid, and it almost never is.
The three legs are: the HRA you actually received, the rent you paid minus ten percent of your salary, and either half your salary in a metro or forty percent everywhere else. Whichever is smallest is your exemption; the rest of your HRA is taxed as ordinary salary. In most real cases the middle leg binds, which is why the exemption tends to land well below both the rent and the allowance.
Two definitions inside that test do most of the damage. 'Salary' means basic plus dearness allowance, not gross — so someone with a large gross but a basic of 40% gets a much smaller exemption than they expect from all three legs at once. And 'metro' is a closed legal list of four cities: Delhi, Mumbai, Kolkata and Chennai. Bengaluru, Hyderabad, Pune and Gurugram are not metros for this purpose regardless of what you pay there, and the difference between the 50% and 40% legs is often decisive.
The calculator names which leg is binding, because that determines whether anything you do next actually helps. If the rent leg binds, paying more rent raises your exemption rupee for rupee. If the salary leg binds, more rent changes nothing at all — you have already extracted everything the section allows at your basic, and only a higher basic would move it.
This exemption exists only in the old regime. Under the new regime HRA is fully taxable, which is a large part of why the regime comparison goes the way it does for anyone paying serious rent in a city. Rent above one lakh a year also requires your landlord's PAN when you claim through your employer.