About the HRA Exemption Calculator
This HRA exemption calculator works out how much of the house rent allowance (HRA) in your salary is exempt from income tax under Section 10(13A) of the Income-tax Act, 1961 and Rule 2A, and how much is taxable. From tax year 2026-27 (FY 2026-27) the Income-tax Act, 2025 and the Income-tax Rules, 2026 replace the old Act and Rules with new section and rule numbers; this calculator applies the same least-of-three formula. Enter your monthly basic salary, dearness allowance, the HRA your employer pays, the rent you pay and whether you live in a metro city.
The exemption is the lowest of three amounts: the actual HRA received; rent paid minus 10% of salary (basic plus DA that counts for retirement benefits); and 50% of salary in a metro or 40% elsewhere. The calculator shows all three limits side by side so you can see which one is binding — and how paying more rent, or a salary restructure, would change your exemption.
It is useful for salaried employees preparing investment declarations, submitting rent receipts to payroll, or comparing the old and new tax regimes. HRA exemption is available only under the old tax regime; under the default new regime the entire HRA is taxable. The 50% rate has long applied only to Delhi, Mumbai, Kolkata and Chennai. The Income-tax Rules, 2026 were proposed to extend it to Bengaluru, Hyderabad, Pune and Ahmedabad; we could not confirm the final list from an official source, so the calculator lets you pick the 50% or 40% rate yourself. Check the rule that applies to your tax year before relying on the 50% option for a city outside the original four.
With the default inputs, the tax-free hra for the year is ₹156,000.00. Change any value above to recalculate instantly.
How to use the hra exemption calculator
- 1Enter your monthly basic salary and any qualifying dearness allowance.
- 2Enter the HRA shown on your payslip.
- 3Enter the monthly rent you pay and the number of months you rented.
- 4Choose metro or non-metro based on where you live.
- 5Read the exempt and taxable HRA and the three limits.
Formula and method
Rule 2A sets the exemption as the least of three amounts for the period you rent: the HRA actually received; rent paid in excess of 10% of salary; and 50% of salary if you live in Delhi, Mumbai, Kolkata or Chennai (plus any city added by the rules for your tax year), or 40% elsewhere. Salary here means basic pay plus dearness allowance that forms part of retirement benefits, plus any fixed-percentage commission on turnover.
The calculator annualises the monthly figures over the months you paid rent, compares the three limits and reports the lowest as tax-free. The remainder of the HRA is added to your taxable salary. Tax saved is estimated by multiplying the exemption by your marginal rate including 4% cess.
- Basic + DA
- Salary for HRA purposes (DA only if it counts for retirement benefits)
- Rent
- Rent actually paid for accommodation you occupy
- 50% / 40%
- Metro or non-metro percentage of salary
Worked examples
Metro employee: ₹50,000 basic, ₹20,000 HRA, ₹18,000 rent
Annual salary is ₹6,00,000. Rent of ₹2,16,000 minus 10% of salary (₹60,000) is ₹1,56,000, which is lower than the HRA received (₹2,40,000) and 50% of salary (₹3,00,000). So ₹1,56,000 is tax-free and ₹84,000 is taxable, saving about ₹48,672 at 31.2%.
Non-metro employee paying high rent
Salary is ₹5,40,000 a year. Rent minus 10% of salary is ₹2,46,000 and 40% of salary is ₹2,16,000, but the HRA received is only ₹1,80,000 — so the whole HRA is exempt.
Rented for only 8 months
Over 8 months salary is ₹4,80,000, HRA ₹1,92,000 and rent ₹2,40,000. Rent minus 10% of salary is ₹1,92,000 — equal to the HRA received — so ₹1,92,000 is exempt, saving about ₹39,936 at 20.8%.
Frequently asked questions
How is HRA exemption calculated?+
It is the lowest of: actual HRA received, rent paid minus 10% of basic salary plus DA, and 50% of basic plus DA in metro cities (40% in other cities). Only that lowest amount is tax-free.
Can I claim HRA under the new tax regime?+
No. The HRA exemption under Section 10(13A) is available only if you opt for the old tax regime. Under the new regime the full HRA is taxable, although the lower slab rates may still leave you better off.
Which cities count as metro for HRA?+
Rule 2A of the 1961 rules names only Delhi, Mumbai, Kolkata and Chennai for the 50% limit; every other city gets 40%. The Income-tax Rules, 2026 were proposed to add Bengaluru, Hyderabad, Pune and Ahmedabad from tax year 2026-27. Check the final rule for your year before claiming 50% for those cities.
Can I claim HRA if I pay rent to my parents?+
Yes, if you genuinely pay rent to parents who own the house, keep a rent agreement and bank transfer records, and they report the rent as income. You cannot pay rent to your spouse to claim HRA.
Is landlord PAN mandatory for HRA?+
Employers require the landlord’s PAN when annual rent exceeds ₹1,00,000. If the landlord has no PAN, a declaration from the landlord is needed instead.
What if I do not receive HRA from my employer?+
If you pay rent but get no HRA, you may be able to claim a deduction under Section 80GG under the old regime, subject to its own limits and conditions.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.