HRA Exemption Calculator
Find your tax-exempt House Rent Allowance under the old regime.
Monthly basis. Exemption = least of the three rules. HRA exemption applies under the old tax regime.
What Is HRA and Why the Exemption Matters
House Rent Allowance (HRA) is a component of your salary paid by your employer to help cover the cost of rented accommodation. If you live in a rented house, a part of this HRA is exempt from income tax under Section 10(13A) of the Income Tax Act, which can meaningfully lower your taxable salary.
The exemption is available only if you actually pay rent and receive HRA as part of your pay structure. Importantly, the HRA exemption is a benefit under the old tax regime. Under the new regime, HRA is generally fully taxable, so you should compare both regimes before deciding. If you live in your own house or do not pay rent, the entire HRA you receive is taxable.
The HRA Exemption Formula
Your exempt HRA is the least of the following three amounts:
- Actual HRA received from your employer during the year.
- Rent paid minus 10% of basic salary (basic salary plus dearness allowance, if applicable).
- 50% of basic salary if you live in a metro city (Delhi, Mumbai, Kolkata or Chennai), or 40% of basic salary if you live in a non-metro city.
Written as a formula:
Exempt HRA = min(Actual HRA, Rent paid − 10% × Basic, [50% or 40%] × Basic)
Whichever of these three is smallest becomes your exemption. The balance of your HRA is added to taxable income. For salaried employees, "basic" here means basic salary plus DA forming part of retirement benefits.
A Worked Example in Rupees
Suppose Riya works in Mumbai (a metro) with these annual figures:
- Basic salary: ₹6,00,000
- HRA received: ₹2,40,000
- Rent paid: ₹3,00,000
Now calculate the three amounts:
- Actual HRA received = ₹2,40,000
- Rent paid − 10% of basic = ₹3,00,000 − ₹60,000 = ₹2,40,000
- 50% of basic (metro) = 50% × ₹6,00,000 = ₹3,00,000
The least of these is ₹2,40,000, so Riya's exempt HRA is ₹2,40,000 and the remaining ₹0 is taxable. If she lived in a non-metro city, the third figure would be 40% × ₹6,00,000 = ₹2,40,000, giving the same exemption here. The calculator above does this comparison automatically once you enter your numbers.
Documents, Conditions and Smart Tips
To claim the exemption, keep rent receipts and ideally a rent agreement. If your total rent exceeds ₹1,00,000 in a year, you must report your landlord's PAN to your employer. Rent paid to a spouse is usually disallowed, while rent paid to parents (with genuine receipts and the parents declaring the income) is generally accepted.
A few tips: you can claim HRA exemption and a home loan deduction together if you genuinely rent in one city and own a home elsewhere. Always treat the rules above as examples and verify the latest limits and your eligibility with the Income Tax Department portal or a qualified tax adviser, since regime choices and thresholds can change.
Frequently Asked Questions
Generally no. The HRA exemption under Section 10(13A) is available only under the old tax regime. Under the new regime HRA is typically fully taxable, so compare your total tax under both regimes before choosing.
For HRA purposes, only Delhi, Mumbai, Kolkata and Chennai are treated as metro cities, allowing 50% of basic salary. All other cities, including Bengaluru, Hyderabad and Pune, are treated as non-metro at 40% of basic.
Yes, if the arrangement is genuine. You should actually pay rent, keep receipts, and your parents should declare that rental income in their return. Rent paid to a spouse is generally not accepted by tax authorities.
If HRA is not part of your salary, you cannot claim Section 10(13A). However, you may be able to claim a deduction under Section 80GG, subject to its own conditions and limits, which you should verify before claiming.
Yes. Employers usually require rent receipts and, where annual rent exceeds ₹1,00,000, your landlord's PAN. Keep these documents safely even after filing in case of any verification.
It is computed for the financial year (April to March) and on a monthly basis where your salary, HRA, rent or city changes during the year. The calculator gives an annual estimate; adjust if your circumstances changed mid-year.