HRA Exemption Calculator
See exactly how much of your House Rent Allowance is tax-free — the least-of-three rule, metro vs non-metro, with the numbers shown.
How to use this HRA calculator
- Enter your monthly basic salary + DA, the HRA you receive, and the rent you pay.
- Pick the tax year, then metro if you live in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad (for FY 2025-26, only the first four count); otherwise pick non-metro.
- The calculator shows your yearly tax-free HRA and the taxable balance.
How HRA exemption is calculated
Under the Income-tax Act 2025 (formerly section 10(13A)), the exempt HRA is the least of these three:
| # | Amount |
|---|---|
| 1 | Actual HRA received |
| 2 | Rent paid − 10% of (basic + DA) |
| 3 | 50% of salary (8 metro cities) or 40% (other cities) |
From tax year 2026-27, under the Income-tax Rules 2026, eight cities qualify for the 50% limit: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Every other city uses 40%. The least-of-three formula itself has not changed.
Worked example
Priya lives in Bengaluru (a metro city from tax year 2026-27). She earns ₹40,000 basic + DA, gets ₹20,000 HRA and pays ₹18,000 rent, monthly.
Yearly: actual HRA ₹2,40,000; rent − 10% salary = ₹2,16,000 − ₹48,000 = ₹1,68,000; 50% of salary = ₹2,40,000. The lowest is ₹1,68,000, so that much is tax-free and ₹72,000 is taxable.
HRA in the old vs new regime
HRA exemption exists only in the old regime. If you choose the new tax regime under Section 202 (formerly 115BAC) you give it up in exchange for lower slab rates — so it's worth comparing both with our income tax calculator.
Frequently asked questions
How is HRA exemption calculated?
Exempt HRA is the least of three amounts: (1) actual HRA received, (2) rent paid minus 10% of salary, and (3) 50% of salary in the eight metro cities or 40% elsewhere. Salary here means basic pay plus dearness allowance.
Which cities are metro for HRA?
From tax year 2026-27, under the Income-tax Rules 2026, eight cities count as metro and get the 50% limit: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Every other city uses 40%. For FY 2025-26 returns, only Delhi, Mumbai, Kolkata and Chennai counted as metro.
Can I claim HRA and a home loan together?
Yes, in some cases — for example, if you live in a rented home in one city and own a house (with a loan) in another, or your own house is genuinely not usable. Both benefits are old-regime only.
Can I claim HRA if I pay rent to my parents?
Yes, if you genuinely pay rent to a parent who owns the home and reports it as income. Keep rent receipts, a rent agreement and bank transfers as proof.
Is HRA exemption available in the new tax regime?
No. HRA exemption is an old-regime benefit only. Under the new tax regime (Section 202, formerly 115BAC) you cannot claim it — compare both with our income tax calculator to see which is better.
What proof do I need to claim HRA?
Rent receipts, and for annual rent above ₹1,00,000 your landlord's PAN. A rent agreement and bank transfer records make the claim stronger.
Is the full HRA tax-free?
No. Only the exempt portion (the least-of-three amount) is tax-free; any HRA above that is added to your taxable salary.
What if I don't pay any rent?
If you don't pay rent, no HRA exemption is available — the whole HRA becomes taxable.