HRA Exemption Calculator
House Rent Allowance is only partly tax-free — the exemption is the smallest of three statutory limits. Enter your annual basic salary, HRA received and rent paid, and see exactly how much of your HRA is exempt, how much is taxable, and which rule is capping the benefit.
Salary & Rent (Annual)
City Type
Results
Exempt HRA (annual)
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The three exemption limits — the smallest one applies
HRA received: exempt vs taxable
Exempt HRA plus taxable HRA equals the HRA you received.
Full Breakdown
Annual and monthly view of every figure used in the exemption test.
| Component | Annual | Monthly |
|---|
Which Rule Binds?
HRA exemption is the least of the three statutory limits, so a single rule always caps the benefit.
| Rule | Amount | Role |
|---|
Calculation Assumptions
- HRA exemption is the minimum of: actual HRA received, 50% of basic (metro) or 40% of basic (non-metro), and rent paid minus 10% of basic salary.
- “Basic salary” here means basic pay plus dearness allowance, as defined under section 10(13A).
- Metro cities are Delhi, Mumbai, Kolkata and Chennai. All other cities use the 40% limit.
- Rent paid minus 10% of basic is floored at zero — if rent does not exceed 10% of basic, no exemption is available.
- The exemption is only available under the old tax regime. Under the new regime, HRA is fully taxable.
- Rent paid to a family member is allowed only if the arrangement is genuine and the rent is actually paid; many employers require proof of payment.
- If annual rent exceeds ₹1,00,000, the landlord’s PAN is generally required by the employer.
HRA exemption figures are estimates based on the salary, HRA, rent and city type you enter. Actual exemptions may differ because of employer-specific HRA structure, allowances that count toward “basic”, proof-of-rent requirements, and changes in tax law. This calculator is for informational purposes only and is not tax advice.
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An HRA Exemption Calculator helps salaried employees estimate how much of their House Rent Allowance (HRA) may be exempt from income tax when they live in rented accommodation. The calculation considers the HRA received from the employer, eligible salary components, actual rent paid, and the applicable city-based limit. Enter the relevant details into the calculator above to estimate your HRA exemption and the remaining taxable HRA. Understanding these figures can help you review your salary structure, prepare payroll declarations, and plan your income tax under the applicable tax regime.
What Is an HRA Exemption Calculator?
An HRA Exemption Calculator is an online tax tool used to estimate the portion of House Rent Allowance that qualifies for exemption from taxable salary. Employers may include HRA in a salary package to help employees meet residential rental expenses. Under the applicable rules, part or all of this allowance may be exempt when the eligibility conditions are satisfied.
The exemption is not automatically equal to the HRA shown on your salary slip. The calculation compares three amounts: the actual HRA received, eligible rent paid above 10% of the relevant salary, and a percentage of that salary based on the applicable city classification. The lowest of these three amounts determines the eligible exemption, subject to the relevant tax rules.
The calculator can also help estimate the portion of HRA that remains taxable after the exemption is applied. The result depends on the salary figures, rental payments, period of occupation, applicable rules, and tax regime selected.
How to Use the HRA Exemption Calculator
To estimate your HRA exemption, gather the details from your salary structure and rental records. Enter the information requested by the calculator and review the resulting breakdown.
- Enter your basic salary: Provide the basic salary attributable to the period for which you are calculating HRA exemption.
- Add eligible dearness allowance: Include DA only to the extent it qualifies under the applicable salary definition and employment terms.
- Enter HRA received: Use the actual House Rent Allowance paid or due for the relevant period, as applicable to the calculation.
- Enter actual rent paid: Provide the rent for the residential accommodation you occupied during that period.
- Select the city classification: Choose the applicable city category and tax year. The salary percentage limit can depend on the rules in force for that year.
- Select the applicable tax regime: HRA exemption is generally available under the old tax regime, not the new tax regime.
- Calculate and review: Compare the three exemption limits and check the estimated exempt and taxable portions of HRA.
Use figures for consistent periods. If your salary, rent, HRA, or residential location changes during the tax year, a single full-year estimate may not accurately represent the exemption for each period. Calculate the relevant periods separately where necessary.
HRA Exemption Formula
For an eligible employee under the old tax regime, the HRA exemption is generally calculated by comparing three amounts for the relevant period. The smallest amount is the exemption available under the standard HRA formula.
After calculating the exemption, the taxable portion of HRA can generally be estimated by subtracting the exempt amount from the eligible HRA received for the same period.
HRA Exemption Example
Consider an employee calculating HRA exemption for a full 12-month period under the old tax regime. Assume the employee has the following salary and rental details, with no additional eligible salary components for this example.
| Input | Annual amount |
|---|---|
| Basic salary | ₹7,20,000 |
| HRA received | ₹3,60,000 |
| Rent paid | ₹4,20,000 |
| Relevant salary for calculation | ₹7,20,000 |
Step 1: Calculate the three exemption limits
- Actual HRA received: ₹3,60,000.
- Rent paid minus 10% of salary: ₹4,20,000 − ₹72,000 = ₹3,48,000.
- City-based limit for the eight listed cities: 50% × ₹7,20,000 = ₹3,60,000.
Step 2: Identify the lowest amount
The lowest of ₹3,60,000, ₹3,48,000, and ₹3,60,000 is ₹3,48,000. Under these assumptions, the estimated HRA exemption is ₹3,48,000.
If the same figures applied to accommodation in another place subject to the 40% limit, the third amount would be ₹2,88,000. The lowest of the three limits would then be ₹2,88,000, resulting in ₹72,000 of taxable HRA. This illustrates why the applicable city category and tax year matter.
These figures are illustrative. Actual exemption depends on the applicable rules, qualifying salary, residential location, rent payments, period of occupation, and eligibility conditions.
HRA Exemption Rules for Metro and Non-Metro Cities
The city-based salary limit is one of the three amounts used in the HRA exemption calculation. The applicable percentage depends on the tax year and the relevant rules for the residential accommodation.
| Residential location | Salary percentage limit |
|---|---|
| Mumbai | 50% |
| Delhi | 50% |
| Kolkata | 50% |
| Chennai | 50% |
| Hyderabad | 50% for Tax Year 2026–27 |
| Pune | 50% for Tax Year 2026–27 |
| Ahmedabad | 50% for Tax Year 2026–27 |
| Bengaluru | 50% for Tax Year 2026–27 |
| Any other place | 40% |
Under the Income-tax Rules, 2026, effective from 1 April 2026, the 50% limit was extended to Hyderabad, Pune, Ahmedabad, and Bengaluru in addition to Mumbai, Kolkata, Delhi, and Chennai. Earlier tax years used the city classification in force for those years, so do not apply the current eight-city list retrospectively without checking the rules applicable to that period.
Who Is Eligible for HRA Exemption?
Eligibility depends on the employee's compensation arrangement, actual rental expenditure, residential accommodation, and selected tax regime. Receiving an allowance labelled HRA does not automatically make the entire amount exempt.
- HRA is part of salary: You must receive an eligible House Rent Allowance from your employer to claim the standard HRA exemption.
- You actually pay rent: The calculation is based on rent expenditure incurred for eligible residential accommodation occupied during the relevant period.
- You live in rented accommodation: The residential accommodation must not be owned by you for the period of the claim.
- You meet the tax-regime conditions: The standard HRA exemption is available under the old tax regime, subject to applicable requirements.
- You maintain supporting records: Keep suitable rent receipts, rental agreements, payment records, and other documents that may be required by your employer or the tax authorities.
If you live in a house you own or do not actually pay rent, the standard HRA exemption is generally unavailable and the HRA is taxable. The exemption also applies only to the eligible period of occupation and rent payment, not automatically to the entire year.
HRA Exemption Under the Old and New Tax Regimes
The tax regime you choose affects whether you can claim the standard HRA exemption. Under India's current tax framework, the default new tax regime does not allow this HRA exemption. Eligible taxpayers who opt for the old tax regime may claim it when the relevant requirements are satisfied.
Old Tax Regime
Eligible salaried employees may claim HRA exemption using the applicable three-limit calculation, subject to actual rent payment, residential accommodation, documentation, and other tax requirements.
New Tax Regime
The standard HRA exemption is not available under the new tax regime. HRA included in salary is generally taxable under the applicable salary rules.
Compare the overall tax consequences of the available regimes rather than choosing solely on the basis of HRA. Other eligible deductions, exemptions, income, and the applicable tax rates may affect which regime is more suitable.
For Tax Year 2026–27 onward, the Income-tax Act, 2025 and Income-tax Rules, 2026 apply. For earlier tax years, use the provisions that governed the relevant period. The correct legal framework matters when preparing a calculation, payroll declaration, or income tax return.
What Is Included in Salary for HRA Calculation?
The salary figure used in the HRA formula is a specific calculation base. It is not necessarily the employee's full gross salary, take-home pay, or cost to company.
- Basic salary: The basic pay relevant to the period for which the HRA exemption is calculated.
- Dearness allowance: DA is included to the extent specified by the applicable HRA rules and the terms of employment.
- Other allowances and benefits: These are not automatically included in the HRA salary base. The applicable rules determine what qualifies.
For the current Tax Year 2026–27, Rule 279 of the Income-tax Rules, 2026 specifies the HRA exemption limits and states how salary is treated for this calculation. When calculating exemption for an earlier tax year, check the salary definition that applied in that year.
Using the full gross salary instead of the eligible salary base may overstate the exemption limit. If your pay includes variable components, allowances, or changes during the year, consult your salary statement and the applicable provisions before entering the figures.
Documents Required for HRA Exemption
Employees claiming HRA exemption should keep records that demonstrate the actual rental arrangement and expenditure. The precise documentation and submission requirements depend on the applicable rules and the employer's payroll process.
- Rent receipts: Records of rent paid during the claimed period.
- Rental agreement: A copy of the agreement, where available and applicable.
- Payment evidence: Bank transfers or other records showing actual rent payments can help support the claim.
- Landlord information: Details requested by the employer or prescribed forms, including tax identification information where required.
- Salary records: Salary slips or other documents showing the HRA paid and the relevant salary components.
Provide accurate information in payroll declarations and retain supporting documents. Do not claim rent that was not actually paid or submit false receipts. The documents required can vary with the applicable reporting rules and the circumstances of the claim.
Common HRA Exemption Calculation Mistakes
Incorrect salary figures, unsupported rent claims, and the wrong tax-year rules can change the calculated exemption. Check the following points before relying on a result.
- Assuming all HRA is exempt: The exempt amount is limited to the lowest of the three prescribed amounts.
- Using gross salary as the salary base: The statutory calculation uses the applicable salary definition, not every item in a compensation package.
- Selecting the wrong city category: The applicable percentage depends on the city rules in force for the relevant tax year.
- Entering annual salary with monthly rent: Convert all figures to the same period before calculating the exemption.
- Claiming exemption without paying rent: The standard HRA exemption generally requires actual rent expenditure for eligible accommodation.
- Using the wrong tax regime: The standard HRA exemption is not available under the new tax regime.
- Ignoring changes during the year: Changes in rent, HRA, salary, or residential location may require period-wise calculations.
- Applying current rules to previous years: Check the city limits and legal provisions applicable to the year being assessed.
Frequently Asked Questions
What is an HRA Exemption Calculator?
An HRA Exemption Calculator estimates how much of the House Rent Allowance received from an employer may be exempt from income tax. It compares the actual HRA received, rent paid minus 10% of eligible salary, and the applicable city-based salary limit. The lowest amount is generally the eligible exemption under the old tax regime.
How is HRA exemption calculated?
HRA exemption is generally the lowest of three amounts: actual HRA received, actual rent paid minus 10% of eligible salary, and 50% or 40% of eligible salary depending on the applicable city classification. The calculation also requires the relevant tax period and satisfaction of the eligibility conditions.
Is HRA exemption available under the new tax regime?
No. The standard HRA exemption is not available under India's new tax regime. Eligible employees may claim HRA exemption under the old tax regime, provided the rental and other applicable conditions are met.
Which cities qualify for the 50% HRA limit in Tax Year 2026–27?
For Tax Year 2026–27, the 50% salary limit applies to qualifying accommodation in Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad, and Bengaluru. The 40% limit applies to other places. Earlier tax years may have a different city list.
Can I claim HRA if I live in my own house?
Generally, no. The standard HRA exemption requires eligible rental accommodation and actual rent expenditure. If you live in a house that you own or do not pay rent, the HRA you receive is generally taxable under the applicable rules.
Can I claim HRA if I live with my parents?
It may be possible if you genuinely rent accommodation from your parents, actually pay rent, receive HRA, and meet the applicable conditions. Supporting documents and accurate reporting are important. A paper arrangement without real rent payments does not establish eligibility.
Is HRA exemption based on basic salary or gross salary?
The HRA formula uses the salary base specified by the applicable rules, not automatically the full gross salary or CTC. It generally includes basic salary and qualifying dearness allowance where applicable. Check the rules relevant to the tax year being calculated.
What happens if my rent is less than 10% of my salary?
If rent paid does not exceed 10% of the eligible salary base, the rent-based amount does not provide a positive exemption. Since the exemption is limited by the lowest of the prescribed amounts, the standard formula may result in no HRA exemption for that period.
How can I calculate taxable HRA?
Subtract the eligible HRA exemption from the actual HRA received for the same period. For example, if eligible HRA is ₹3,60,000 and the calculated exemption is ₹3,48,000, the taxable HRA is ₹12,000, assuming all relevant conditions are satisfied.
Do I need rent receipts to claim HRA exemption?
You should maintain evidence of actual rent payments and provide the supporting information required by your employer or the applicable tax rules. Rent receipts, rental agreements, payment records, and landlord details may be relevant to substantiating the claim.
Can I claim HRA exemption for only part of the year?
Yes, the calculation may apply only to the eligible period during which you occupied rented accommodation and incurred qualifying rent expenditure. If your residence, salary, HRA, or rent changes during the year, calculate the relevant periods using the applicable figures and rules.
Does HRA exemption reduce my total income tax by the same amount?
No. The HRA exemption reduces the amount of HRA included in taxable salary, subject to the applicable tax rules. The resulting tax saving depends on your overall taxable income, tax regime, applicable tax rates, and other relevant factors.
Disclaimer: This HRA exemption content is intended for general informational and tax-planning purposes. Results are estimates based on the inputs provided and the relevant calculation assumptions. HRA eligibility, salary definitions, city classifications, documentation requirements, and tax treatment depend on the applicable legislation and individual circumstances. Tax Year 2026–27 is governed by the Income-tax Act, 2025 and Income-tax Rules, 2026, while earlier years may follow different provisions. Verify important calculations with official tax guidance or a qualified tax professional before filing a return or making a tax decision.