The calculation of House Rent Allowance (HRA) can vary based on the policies of the organization, location, and the salary structure. The general calculation method of HRA involves a certain percentage of the basic salary. In this case, your employer is using 18% of the basic salary. However, the tax-exempt portion of the HRA is calculated as the least of the following three conditions:
1. Actual HRA received
2. 50% of salary (basic + DA) if residing in metro cities (40% for non-metros)
3. Actual rent paid less 10% of salary (basic + DA)
So, if your employer is providing 18% of the basic as HRA, it is within the norms but whether it is fully taxable or not would depend on the conditions mentioned above.
Please consult with your accounts or HR department for detailed calculations as they would be aware of your exact salary structure and the city of residence. For more detailed information about HRA calculations and exemptions, you can visit the official income tax website of India.
https://www.incometaxindia.gov.in