HRA Exemption Calculator
Tax-exempt house rent allowance under Section 10(13A).
How the exemption is worked out
| Rule 2A limit | Amount |
|---|---|
| Actual HRA received | ₹2,40,000 |
| Rent paid − 10% of basic + DA | ₹1,20,000 |
| 50% of basic + DA (metro) | ₹3,00,000 |
| Exempt HRA (least of the three) | ₹1,20,000 |
| Taxable HRA | ₹1,20,000 |
HRA (House Rent Allowance) exemption is the part of your rent allowance that escapes income tax under Section 10(13A). It is the least of three amounts: the actual HRA you receive, your rent paid minus 10% of basic salary plus DA, and 50% of basic (metro) or 40% (non-metro). Enter your figures above to see the exempt and taxable split instantly.
The exemption is available only under the old tax regime — if you opt for the new regime, your entire HRA is taxable. Salaried employees who live in rented accommodation and receive HRA as a salary component can claim it; those who pay no rent get no exemption at all.
How is HRA exemption calculated?
Rule 2A of the Income Tax Rules makes the exempt HRA the least of three limits: (1) actual HRA received from your employer, (2) rent paid minus 10% of basic salary + DA, and (3) 50% of basic + DA if you live in a metro (Delhi, Mumbai, Kolkata or Chennai), or 40% anywhere else. Whatever remains of your HRA after the exemption is added to your taxable salary.
Worked example: annual basic + DA of ₹6,00,000, HRA received ₹2,40,000, rent paid ₹1,80,000 in a metro. The three limits are ₹2,40,000 (actual HRA), ₹1,80,000 − ₹60,000 = ₹1,20,000 (rent minus 10% of basic), and ₹3,00,000 (50% of basic). The least is ₹1,20,000 — that much HRA is exempt, and the remaining ₹1,20,000 is taxable.
How to use this calculator
- Enter your annual basic salary + dearness allowance — take it from your salary slip, not your full CTC.
- Enter the annual HRA your employer pays and the total rent you actually pay for the year.
- Pick Metro if you rent in Delhi, Mumbai, Kolkata or Chennai; Non-metro for every other city, including Bengaluru, Hyderabad, Pune and Gurgaon.
- Read off the exempt (tax-free) and taxable HRA, and open the breakdown table to see which of the three limits applied.
HRA rules worth knowing in India
Only Delhi, Mumbai, Kolkata and Chennai count as metros for the 50% limit — Bengaluru, Hyderabad, Pune, Noida and Gurgaon are all 40% cities, no matter how high their rents run. If your rent minus 10% of basic is the binding limit, a salary restructure that raises HRA will not increase your exemption.
Keep rent receipts or bank transfer proofs for every claim. If your annual rent exceeds ₹1,00,000, you must report your landlord's PAN to your employer; if the landlord has no PAN, a signed declaration is required. Paying rent to your parents is legal and claimable — pay by bank transfer, sign a rent agreement, and remember the rent becomes taxable income in their hands.
Frequently asked questions
What is the formula for HRA exemption?
Exempt HRA is the least of three amounts: actual HRA received, rent paid minus 10% of basic salary + DA, and 50% of basic + DA in a metro (40% elsewhere). The balance of your HRA is taxable as salary income.
Can I claim HRA exemption under the new tax regime?
No. The Section 10(13A) exemption is available only if you opt for the old tax regime. Under the new (default) regime the entire HRA is taxable, so compare both regimes before choosing — a large HRA claim is one of the main reasons the old regime can still win.
Which cities count as metros for HRA?
Only Delhi, Mumbai, Kolkata and Chennai qualify for the 50% of basic limit. Bengaluru, Hyderabad, Pune, Ahmedabad, Noida and Gurgaon are treated as non-metros, so the 40% limit applies there regardless of actual rent levels.
Can I pay rent to my parents and claim HRA?
Yes, provided the arrangement is genuine: you actually live in their house, pay rent by bank transfer, and ideally have a rent agreement. The rent you pay is taxable rental income for your parents, who can claim the 30% standard deduction on it. You cannot pay rent to your spouse.
Do I need my landlord's PAN or rent receipts?
If your annual rent exceeds ₹1,00,000, your employer must collect the landlord's PAN (or a no-PAN declaration) before allowing the exemption in TDS. Keep rent receipts or bank statements for all claims — the tax department can ask for proof even years later.
What if I get HRA but live in my own house or pay no rent?
The exemption is zero — the rent-minus-10%-of-basic limit becomes nil, so your entire HRA is taxable. Conversely, if you pay rent but receive no HRA component, you cannot use Section 10(13A); you may instead claim a deduction under Section 80GG, subject to its ₹5,000-per-month cap.
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Disclaimer: results are estimates based on the inputs and published rules/rates, for information only — not investment, tax or legal advice. Verify important decisions with a qualified professional. See our full disclaimer.