How is the HRA exemption calculated?

It is the least of three figures: actual HRA received; rent paid minus 10% of salary (basic + DA); and 50% of salary in a metro or 40% elsewhere. Whatever remains of the HRA after the exemption is taxable as salary. This is the Section 10(13A) rule read with Rule 2A.

Which cities count as metro?

Only Delhi, Mumbai, Kolkata and Chennai qualify for the 50% limb. Gurgaon, Noida, Bengaluru, Hyderabad, Pune and every other city use 40%, even where rents are metro-like — a common filing mistake.

Can I claim HRA in the new tax regime?

No. The Section 10(13A) exemption is available only under the old regime; the new regime taxes your full HRA (as of July 2026). If HRA is a large slice of your pay and your rent is high, compare both regimes before choosing.

Why is my exemption zero?

Usually because rent paid is at or below 10% of salary — the second limb becomes zero and, being the least, sets the exemption to zero. It is also zero if you received no HRA or paid no rent, and you cannot claim it for a house you own and live in.

Can I pay rent to my parents and claim HRA?

Yes, if the arrangement is genuine — actual bank transfers, ideally a rent agreement, and the parent declaring the rent as income. Rent paid to a spouse doesn’t qualify. Collect the landlord’s PAN when annual rent exceeds ₹1,00,000.

Is my salary data uploaded?

No — everything is calculated in your browser and nothing is sent to a server.

HRA Exemption Calculator

Calculate your House Rent Allowance exemption under Section 10(13A).

Runs in your browser — files never leave your device

Basic salary (annual)₹HRA received₹Rent paid₹

Metro city (50% of salary)

HRA exemption

₹1,80,000

Taxable HRA

₹1,20,000

How it works

This calculator splits your house rent allowance into exempt and taxable parts under Section 10(13A) of the Income-tax Act. It takes four inputs — annual basic salary, annual HRA received, annual rent paid and whether you live in a metro — and applies the least-of-three test from Rule 2A. The exemption is the least of:

actual HRA received for the year;
rent paid minus 10% of salary;
50% of salary in a metro (Delhi, Mumbai, Kolkata, Chennai) or 40% elsewhere.

Salary here means basic pay plus dearness allowance that forms part of retirement benefits; this tool has a single salary field, so enter basic and any qualifying DA together. Whatever part of the HRA is not exempt is added to your taxable salary — and if your rent is at or below 10% of salary, the second limb, and therefore the whole exemption, is zero.

Worked example with the defaults — basic ₹6,00,000, HRA ₹3,00,000, rent ₹2,40,000, metro city. Limb one is the actual HRA, ₹3,00,000. Limb two is 2,40,000 − 60,000 (10% of salary) = ₹1,80,000. Limb three is 50% × 6,00,000 = ₹3,00,000. The least is ₹1,80,000, so that much of the HRA is exempt and the remaining ₹1,20,000 is taxed. Rent is the binding limb here — at this salary, higher rent would raise the exemption rupee for rupee until another limb takes over.

Two caveats matter. First, the HRA exemption exists only under the old tax regime — under the new regime your entire HRA is taxable (as of July 2026), so run a regime comparison before counting on the benefit. Second, the tool works on whole-year totals, while the law strictly applies the test separately to each period in which salary, rent or city changes — a mid-year rent revision or relocation shifts the exact figure. Keep rent receipts, and collect your landlord’s PAN when annual rent exceeds ₹1,00,000. These are estimates for planning — verify with official rules or a CA.

Frequently asked questions

How is the HRA exemption calculated?: It is the least of three figures: actual HRA received; rent paid minus 10% of salary (basic + DA); and 50% of salary in a metro or 40% elsewhere. Whatever remains of the HRA after the exemption is taxable as salary. This is the Section 10(13A) rule read with Rule 2A.
Which cities count as metro?: Only Delhi, Mumbai, Kolkata and Chennai qualify for the 50% limb. Gurgaon, Noida, Bengaluru, Hyderabad, Pune and every other city use 40%, even where rents are metro-like — a common filing mistake.
Can I claim HRA in the new tax regime?: No. The Section 10(13A) exemption is available only under the old regime; the new regime taxes your full HRA (as of July 2026). If HRA is a large slice of your pay and your rent is high, compare both regimes before choosing.
Why is my exemption zero?: Usually because rent paid is at or below 10% of salary — the second limb becomes zero and, being the least, sets the exemption to zero. It is also zero if you received no HRA or paid no rent, and you cannot claim it for a house you own and live in.
Can I pay rent to my parents and claim HRA?: Yes, if the arrangement is genuine — actual bank transfers, ideally a rent agreement, and the parent declaring the rent as income. Rent paid to a spouse doesn’t qualify. Collect the landlord’s PAN when annual rent exceeds ₹1,00,000.
Is my salary data uploaded?: No — everything is calculated in your browser and nothing is sent to a server.

HRA Exemption Calculator

How it works

Frequently asked questions

Related tools