HRA Exemption Calculator

Last updated: Jul 22, 2026 | Reviewed by Calkulator Team | 2 min read

Tax

Claim maximum HRA exemption and reduce your tax bill

HRA exemption is the minimum of: actual HRA received, 50% of basic (metro) or 40% (non-metro), or rent paid minus 10% of basic. If your rent is ₹20,000 and basic is ₹30,000 in a metro, your exemption might be less than you expect.

Keep rent receipts and your landlord PAN handy — HRA claims above ₹1 lakh/year require landlord PAN.

Salary & Rent Details (Monthly)

Basic Salary (Monthly ₹)

₹

From your monthly salary slip

HRA Received from Employer (Monthly ₹)

₹

HRA component in salary slip

Actual Rent Paid (Monthly ₹)

₹

As per your rent agreement

City Type

Metro: Mumbai, Delhi, Bangalore, Chennai, Kolkata, Hyderabad

HRA Exemption Formula (Sec 10(13A))

Exemption = MINIMUM of:

(i) HRA received from employer

(ii) Actual rent paid − 10% of Basic

(iii) 50% of Basic (metro) or 40% of Basic (non-metro)

Monthly HRA Exemption

₹—

Enter salary and rent details

Annual HRA Exemption

₹—

Annual tax saving

Taxable HRA

₹—

HRA Received − Exemption

Tax Saving (30% bracket)

₹—

Annual saving estimate

10% of Basic (Monthly)

₹—

Threshold for limit (ii)

Effective Rent (After 10%)

₹—

Rent − 10% Basic

3 Limits Comparison (Monthly)

Limit	Amount	Status
(i) HRA Received	—	—
(ii) Rent − 10% of Basic	—	—
(iii) 50% of Basic	—	—
HRA Exemption (Minimum)	—	✓ Applied

Live Result Illustration

Visual summary — updates instantly as you enter values above

LIVE

Real-Life Guide to Using the HRA Exemption

House Rent Allowance tax exemption. Use the examples and checks below to turn the number into a practical decision.

When this calculator is useful

Salaried employees paying rent who want to know how much of their House Rent Allowance is tax-exempt before filing returns or submitting rent receipts to their employer for TDS adjustment use this calculator.

For most people, the best way to use the HRA Exemption is to try the real case first, then change one input at a time. That makes the trade-off visible. For example, with a loan calculator you can change tenure while keeping the same rate; with an investment calculator you can change return assumption while keeping the same monthly contribution; with a health, education or measurement calculator you can check how much one input changes the final category.

The result should answer a practical question: Can I afford this? How much should I save? Is this score enough? Is this measurement within range? What is the safer or cheaper option? If the output does not answer the decision clearly, adjust the inputs until the scenario matches your real situation.

Real-Life Example

Metro-city renter claiming HRA exemption: An employee in Bengaluru has a basic salary of ₹40,000/month, receives HRA of ₹20,000/month, and pays actual rent of ₹18,000/month.

1The three figures compared are: HRA received ₹20,000, rent minus 10% of basic (₹18,000 − ₹4,000) = ₹14,000, and 50% of basic (metro) = ₹20,000. The exemption is the least of these, so ₹14,000/month (₹1,68,000/year) is exempt, and the remaining ₹6,000/month of HRA is taxable.

2Now change one input, such as rate, time, quantity, unit or score, and compare the new result with the first one.

Even in a metro city with high HRA, the exemption is often capped by the rent-minus-10%-of-basic rule rather than by the HRA amount itself.

Practical Advice

Use the HRA Exemption as a planning tool, not just a number generator. Write down the inputs you used, because the final answer is meaningful only when you remember the assumptions behind it.

If the decision affects money, health, tax, safety, academics or legal compliance, keep a second check ready. That second check may be a bank quote, payslip, official rule, prescription, site measurement, mark sheet or invoice.

Common Mistakes

Assuming the entire HRA received is tax-exempt, when the exemption is actually the least of three amounts: HRA received, rent paid minus 10% of basic salary, and 50% (metro) or 40% (non-metro) of basic salary.
Forgetting that HRA exemption is calculated month-by-month if salary or rent changes during the year, not as a single annual lump-sum computation.
Not collecting rent receipts or a rental agreement, which are typically required to substantiate the claim, especially when annual rent crosses the threshold that triggers a landlord PAN requirement.
Believing that paying rent to a parent or family member disqualifies the claim entirely — it can still be valid if the rent is genuinely paid and documented, though it invites closer scrutiny.
Using gross salary instead of basic salary (plus DA, where applicable) in the exemption formula, which overstates or understates the 10%-of-salary deduction step.

How to Interpret Results

The exempt amount shown is what reduces your taxable salary income for the year; the remaining portion of your HRA (received minus exempt) is added back to taxable income, so a low exemption relative to HRA received usually means your rent is low compared to your basic salary.

A good interpretation looks at both the main result and the supporting values. If a page shows totals, ratios, categories, schedules or warnings, read those together instead of focusing only on the biggest number.

HRA Exemption FAQs

Useful answers for interpreting the output, avoiding mistakes and using the result responsibly.

What exactly is exempt from tax — is it the whole HRA I receive?

No. The exemption is the smallest of three values: actual HRA received, rent paid minus 10% of basic salary, and 50% or 40% of basic salary depending on whether you live in a metro city, under the currently applicable rule. Whatever HRA remains above that amount is taxed as normal salary income.

Which cities count as "metro" for the 50% rate?

Typically only a small set of the largest cities qualify for the higher 50% rate, with all other locations falling under the 40% rate — check the current list, as classification is fixed by rule and does not depend on your personal cost of living.

Can I claim HRA exemption if I pay rent to my parents?

Generally yes, provided the arrangement is genuine — rent is actually transferred (ideally via bank transfer) and your parents declare it as rental income on their return — but this scenario is more likely to be scrutinized, so keep clear documentation.

Do I need my landlord's PAN to claim this exemption?

If your annual rent crosses a specified threshold, employers typically require the landlord's PAN (or a declaration if the landlord has no PAN) before allowing the exemption in TDS calculations.

What if I switched cities or rent amounts partway through the year?

HRA exemption should technically be computed separately for each period with different salary, rent, or city classification, then summed — using a single annual average can give an inaccurate result if your situation changed mid-year.

I live in my own house — can I still claim HRA exemption?

No, HRA exemption requires that you actually pay rent for the accommodation you live in; if you own and live in your home, HRA received is fully taxable, though other benefits like home loan interest deduction may apply instead.

Does choosing the new tax regime affect my HRA exemption?

Under the current new regime, most exemptions including HRA are generally not available, so this exemption is typically only relevant if you opt for the old tax regime — check which regime applies to your filing.

How do I actually use this exempt amount at tax filing time?

The exempt amount reduces your gross taxable salary before computing tax; if your employer didn't fully account for it during the year via Form 12BB, you can still claim the correct exemption directly while filing your income tax return.

What is HRA Exemption?

HRA (House Rent Allowance) is a salary component that can be partially or fully tax-exempt under Section 10(13A) of the Income Tax Act. The exemption is the minimum of three limits: actual HRA received, rent paid minus 10% of Basic salary, and 50% of Basic (metro) or 40% of Basic (non-metro).

This exemption is only available under the Old Tax Regime. Under the New Tax Regime, no HRA exemption is allowed. If you live in your own home or don't pay rent, the entire HRA is taxable. Always submit rent receipts to your employer for TDS deduction benefit.

Example Calculation

Scenario: Basic ₹50,000/mo, HRA received ₹25,000, Rent paid ₹20,000, Metro city

1(i) HRA received = ₹25,000

2(ii) Rent − 10% Basic = ₹20,000 − ₹5,000 = ₹15,000

3(iii) 50% of Basic = ₹25,000 | Minimum = ₹15,000

✓ Monthly HRA Exemption = ₹15,000 | Annual = ₹1,80,000

Frequently Asked Questions

HRA exemption under Section 10(13A) explained

Can I claim HRA exemption under the New Tax Regime?

No. HRA exemption under Section 10(13A) is only available in the Old Tax Regime. Under the New Tax Regime (default from FY 2023-24), no HRA exemption is allowed. If you choose the New Regime, your entire HRA received from your employer is taxable. This is one of the key reasons why salaried employees paying high rent may prefer the Old Regime.

Do I need to submit rent receipts to my employer?

Yes, if annual HRA exemption claim exceeds ₹1 lakh (rent paid exceeds ₹1 lakh per year), you must submit your landlord's PAN. Below ₹1 lakh annually, only rent receipts are sufficient. Your employer uses this to calculate TDS and allow HRA exemption during the year. If not submitted to employer, you can still claim it while filing ITR.

Which cities are classified as 'Metro' for HRA calculation?

Metro cities for HRA purposes (50% of Basic): Mumbai, Delhi, Kolkata, and Chennai. From a practical standpoint, many employers and ITR forms also treat Bangalore, Hyderabad, and Pune similarly, though strictly the 50% limit is only for the four original metros. Non-metro cities (all others): 40% of Basic applies for limit (iii).