Taxation
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HRA Exemption Calculator
Work out the tax-exempt portion of your house rent allowance. Adjust any input below and your results update instantly.
Understanding HRA exemption
The concept, the motivation, and what to watch out for.
Not all of your HRA is automatically tax-free
House Rent Allowance is a salary component, but the tax-exempt part of it is capped by three separate limits — whichever of them is smallest is what you actually get to exclude from tax. The rest of your HRA is taxed like regular salary.
This calculator applies all three limits to your real numbers and tells you exactly which one is holding your exemption back, and by how much.
Only available under the old regime
The new tax regime doesn't allow the HRA exemption at all — your entire HRA is taxable there, regardless of rent paid.
Your city's metro status matters
The salary-percentage limit is 50% in a metro city and 40% everywhere else — and the metro list itself was just expanded for the first time in over 40 years.
How this calculator helps
Enter your salary, HRA, rent, and city — see your exempt amount, your taxable HRA, and exactly which limit is binding.
Work out your exempt HRA
Fill in the starred fields on the left — your results update instantly on the right.
Your details
e.g. Mumbai (metro, 50%)
≈ ₹6.00 L
e.g. ₹6,00,000 a year
≈ ₹2.40 L
e.g. ₹2,40,000 a year
≈ ₹2.00 L
e.g. ₹2,00,000 a year
These are example numbers. Edit any input on the left to see your own.
Your HRA exemption
₹1.40 L
Rent − 10% of salary
HRA received
₹2.40 L
Taxable HRA
₹1.00 L
₹1.40 L of your ₹2.40 L HRA is exempt — capped by rent − 10% of salary.
The three limits, side by side
Whichever limit is smallest becomes your exemption — highlighted below.
LimitAmountStatus
Actual HRA received₹2.40 L
Not binding
80% of the highest limit
Rent − 10% of salary₹1.40 LThis limit
Binding limit
47% of the highest limit
50% of salary₹3.00 L
Not binding
100% of the highest limit
Compare scenarios
See how a metro vs. non-metro city changes your exemption.
Your plan
Mumbai
₹1.40 L
HRA exemption
Baseline
If metro city
50% limit
₹1.40 L
HRA exemption
Your plan
If non-metro city
40% limit
₹1.40 L
HRA exemption
No change
Worked example, using your numbers
A step-by-step walkthrough of your HRA exemption.
Step 1 · Three limits
Actual HRA, rent above the salary offset, and the salary-percentage cap —
₹2.40 L / ₹1.40 L / ₹3.00 L
Step 2 · The smallest wins
Rent − 10% of salary is the smallest, so your exemption is
₹1.40 L
Step 3 · Taxable HRA
The rest of your HRA is added to your taxable income —
₹1.00 L
✓
Your HRA exemption comes to ₹1.40 L, capped by rent − 10% of salary.
Personalised insights
What your numbers reveal, and what changing them would do.
Rent − 10% of salary is holding back your exemption
Of the three limits, this is the smallest at ₹1.40 L — that's your exemption.
Mumbai — 50% of salary limit applies
Mumbai qualifies for the metro rate, giving you a higher salary-percentage ceiling than a non-metro city would.
₹1.00 L of your HRA is still taxable
Out of ₹2.40 L received, ₹1.40 L is exempt and the remaining ₹1.00 L is added to your taxable salary.
This exemption only applies under the old regime
If you're on the new tax regime, none of this is exempt — your entire HRA is taxable regardless of rent paid.
How this is calculated
Every step of the math behind your result, shown in the open.
HRA exemption — the smallest of three limits
HRA = actual HRA received, Rent = actual rent paid, r = 50% metro or 40% non-metro, Salary = basic salary + DA
Whichever of these three comes out smallest is your actual tax-free HRA — not just the amount your employer labeled as HRA.
Example: min(₹2.40 L, ₹1.40 L, ₹3.00 L) → ₹1.40 L exemption
Limit 2 — rent above the salary offset
Rent = actual rent paid, Salary = basic salary + DA, Limit_2 = rent-based limit
Only the rent you pay above 10% of your salary counts toward this limit — a modest rent relative to a high salary can cap your exemption here.
Example: ₹2.00 L − 10% × ₹6.00 L → ₹1.40 L
Limit 3 — percentage of salary
r = 50% in a metro city; 40% elsewhere, Salary = basic salary + DA, Limit_3 = salary-based limit
A flat ceiling on the exemption regardless of how much rent you actually pay or HRA you receive.
Example: 50% × ₹6.00 L → ₹3.00 L
Taxable HRA
HRA = actual HRA received, Exemption = the smallest of the three limits, Taxable = the remainder — added to your taxable income
Whatever HRA you received beyond the exemption is added to your taxable salary like any other income.
Example: ₹2.40 L − ₹1.40 L → ₹1.00 L taxable
Assumptions
- "Salary" here means basic salary plus dearness allowance only — not your full CTC or any other allowances, matching how Rule 2A defines it.
- The exemption is computed on an annual basis — if your salary, HRA, or rent changed partway through the year, a precise calculation would need month-by-month figures instead.
- Metro cities (50% limit) are Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, and Ahmedabad as of FY 2026-27 — every other city uses the 40% limit.
- Figures are indicative only — not tax advice. Consult a chartered accountant for your actual HRA exemption claim.
Did you know?
A few facts behind HRA exemption rules.
40 yrs
The metro list just changed for the first time since the 1980s
Bengaluru, Hyderabad, Pune, and Ahmedabad joined Delhi, Mumbai, Kolkata, and Chennai at the 50% HRA limit from FY 2026-27 — the metro city list hadn't been revised in over four decades.
Old regime
One of the few exemptions still worth the old regime
HRA exemption disappears entirely under the new regime — for salaried employees paying significant rent, this alone can tip the old-vs-new regime decision.
10%
A high salary can quietly shrink your exemption
Since the rent-based limit only counts rent above 10% of your salary, a salary hike without a matching rent increase can lower your HRA exemption even if nothing else changes.
Parents
Paying rent to a parent can be a legitimate claim
As long as the arrangement is genuine and documented, rent paid to a parent who owns the home can support an HRA exemption — just not to a spouse, per tax department guidance.
₹1L
Cross ₹1 lakh in annual rent, and PAN is mandatory
Landlord PAN details become a documentation requirement once your annual rent crosses ₹1,00,000 — a common paperwork trip-up during tax filing season.
Frequently asked questions
Straight answers to the questions we hear most about HRA exemption.
Can I claim HRA exemption under the new tax regime?
No — the new regime doesn't allow the HRA exemption at all. Your entire HRA is taxable there regardless of how much rent you actually pay. This exemption is old-regime only.
Which cities count as metro for HRA purposes?
Delhi, Mumbai, Kolkata, and Chennai have always qualified. As of FY 2026-27, Bengaluru, Hyderabad, Pune, and Ahmedabad were added too — the first expansion of this list in over four decades. Every other city uses the 40% limit.
What if I don't pay any rent?
Your exemption is zero — the rent-based limit (rent minus 10% of salary) becomes zero or negative when there's no rent, so it's always the binding limit and your entire HRA is taxable.
Do I need proof of rent to claim this?
Yes — rent receipts and a rental agreement are standard requirements, and if your annual rent exceeds ₹1,00,000, you'll also need your landlord's PAN for your employer's records.
Can I claim HRA exemption if I pay rent to a parent or relative?
Yes, provided the arrangement is genuine — a real rent agreement, actual payments (ideally via bank transfer), and the landlord (your parent) declaring that rental income themselves.
Why is my exemption lower than my actual HRA, even though I pay rent close to it?
Check which of the three limits is binding in your breakdown above — a modest rent relative to a high salary, or a lower non-metro percentage limit, can each cap the exemption well below your actual HRA.
Is this tax advice?
No. This tool provides indicative estimates based on your inputs and the rules in force at the time. Consult a chartered accountant for your actual HRA exemption claim.
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Learn more
Articles to go deeper on the ideas behind this calculator.
Fundamentals
The three HRA limits, and which one usually binds
Why the smallest of three numbers decides your exemption.
5 min read
Strategy
Claiming HRA when you rent from a parent
What documentation actually holds up.
5 min read
Strategy
HRA vs the new tax regime: does it change your choice?
When paying significant rent tips the old-vs-new decision.
6 min read