worldofcalcsHRA Exemption Calculator
About HRA Exemption
HRA exemption is available to salaried employees who pay rent and choose the old tax regime. Enter annual figures to see how much of your HRA is tax-free.
Input Details
- Basic Salary: annual basic pay plus dearness allowance.
- HRA Received: Total HRA received from employer.
- Rent Paid: Total rent paid during the year.
- Metro City: tick if you live in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad (the last four from FY 2026-27).
How to Use
- Enter your annual Basic Salary and HRA Received.
- Enter the total annual rent paid.
- Select if you live in a Metro city.
- View the exempt and taxable HRA amounts.
Calculation Logic
Exemption is the minimum of the following three:
- Actual HRA Received.
- 50% of Salary (metro) or 40% (non-metro).
- Rent Paid minus 10% of Basic Salary.
What is HRA exemption?
House Rent Allowance (HRA) is the part of your salary your employer pays to help with rent. If you live in rented accommodation and choose the old tax regime, part or all of it can be exempt from income tax. The exempt amount is not simply the rent you pay; it is the lowest of three limits, so two people paying the same rent can get very different exemptions. Under the new tax regime, HRA is fully taxable.
HRA exemption formula
'Salary' here means basic pay plus dearness allowance (where it counts towards retirement benefits) and any commission fixed as a percentage of turnover, not your gross pay. The 50% limit applies if you live in one of the eight metro cities; everywhere else it is 40%. Any HRA that is not exempt is added to your taxable salary. Use figures only for the months you actually lived in rented accommodation.
Rules worth knowing
- Metro cities (50% limit) from FY 2026-27: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. All other cities use 40%.
- HRA exemption is available only under the old tax regime.
- If your annual rent is more than ₹1 lakh, you need to give your employer the landlord's PAN.
- Keep rent receipts and a rent agreement. Your employer may ask for them, and so can the tax department during scrutiny.
- You can pay rent to your parents if they own the house and the arrangement is genuine; they must declare the rent as income.
- Rent paid to your spouse is generally not accepted, and you cannot claim HRA for a house you own and live in.
Worked example: renting in Bengaluru
- Annual basic + DA: ₹6,00,000. HRA received: ₹3,00,000. Rent: ₹30,000 a month (₹3,60,000 a year), living in Bengaluru
- Limit 1, actual HRA received: ₹3,00,000
- Limit 2, 50% of salary (Bengaluru counts as a metro from FY 2026-27): ₹3,00,000
- Limit 3, rent minus 10% of salary: ₹3,60,000 − ₹60,000 = ₹3,00,000
- Exempt HRA is the lowest of the three, ₹3,00,000, so none of the HRA is taxable
- Before FY 2026-27 Bengaluru used the 40% limit: only ₹2,40,000 would be exempt and ₹60,000 taxable
HRA exemption by monthly rent
For an employee with annual basic + DA of ₹6,00,000 and HRA of ₹3,00,000.
| Monthly rent | Exempt HRA (metro) | Exempt HRA (non-metro) |
|---|---|---|
| ₹10,000 | ₹60,000 | ₹60,000 |
| ₹15,000 | ₹1,20,000 | ₹1,20,000 |
| ₹20,000 | ₹1,80,000 | ₹1,80,000 |
| ₹25,000 | ₹2,40,000 | ₹2,40,000 |
| ₹30,000 | ₹3,00,000 | ₹2,40,000 |
| ₹40,000 | ₹3,00,000 | ₹2,40,000 |
Rent of up to 10% of salary (₹5,000 a month here) gives no exemption. At higher rents the exemption is capped by the HRA received or the city limit, whichever is lower.