HRA Exemption Calculator
Enter your annual basic plus DA, the HRA you receive and the rent you pay to see how much is exempt — and, more usefully, which of the three statutory limits is holding the number down.
Your year
What is exempt
Exempt under Section 10(13A)
— of the — HRA you receive
- 1. HRA actually received —
- 2. Rent paid less 10% of salary —
- 3. — of salary —
- Taxable balance of HRA —
What this calculator assumes
- Salary means basic pay plus dearness allowance, and the DA counts only where the terms of employment so provide. Every other allowance is outside it — and so is commission on turnover, despite the widespread claim otherwise.
- Your pay, your rent and your city stayed the same for the whole year. Where any of them changed, the exemption has to be worked out separately for each period and added up — this page computes a single period.
- The 50% share applies only in Delhi, Mumbai, Kolkata and Chennai. Everywhere else is 40%.
- The exemption is claimed under the old regime only. Nothing here is a tax computation, and it does not tell you which regime leaves you better off.
- It assumes the rent was genuinely paid and is evidenced. Receipts, a rent agreement, a payment trail and your landlord's PAN where required are the reader's problem, not the calculator's.
How the exemption is worked out
House rent allowance is not exempt as such. Section 10(13A) exempts the least of three amounts, and the whole of the rest is ordinary taxable salary. The three are:
- the HRA actually received for the period;
- the rent paid, minus 10% of salary;
- 50% of salary in a metro, 40% of salary anywhere else.
One point of housekeeping. Section 10(13A) belongs to the Income-tax Act, 1961, repealed with effect from 1 April 2026; under the Income-tax Act, 2025 the same relief sits at Serial No. 11 of the Table in Schedule III rather than at a numbered section. The limits are unchanged — only the address moved. We keep the old number because payslips, portal fields and searches all still use it.
Because it is a least-of test, only one of the three ever decides your answer, and knowing which is more useful than the exemption itself. If the metro share binds, more rent changes nothing. If the rent limit binds, every extra rupee raises the exemption one for one. If the HRA received binds, the question is closed. The calculator marks the binding limit for that reason.
Take a Mumbai employee with basic plus DA of ₹7,20,000 for the year, HRA of ₹2,88,000 and rent of ₹3,00,000 — ₹25,000 a month. The first limit is ₹2,88,000. The second is ₹3,00,000 minus 10% of ₹7,20,000, which is ₹3,00,000 less ₹72,000, or ₹2,28,000. The third is 50% of ₹7,20,000, or ₹3,60,000. The least of the three is ₹2,28,000, so that much is exempt and the remaining ₹60,000 of HRA is taxed like any other salary.
The 10% subtraction assumes you would have spent something on housing regardless, so the allowance only shelters rent above that floor. An employee paying rent of 10% of salary or less therefore gets nothing, whatever the HRA line on the payslip says.
Only Delhi, Mumbai, Kolkata and Chennai are metros for HRA
This is the single most common error in Indian personal-finance content, and it is expensive. Rule 2A names its metros exactly, and in the language of 1962: Bombay, Calcutta, Delhi and Madras. Delhi, Mumbai, Kolkata and Chennai is the entire list, and CBDT's own circular tabulates the limits under only those two headings, metro and everywhere else.
Bengaluru is not a metro for HRA. Neither is Hyderabad, Pune, Ahmedabad, Chandigarh or Jaipur. Gurugram and Noida catch people out most: the provision names Delhi, and an NCR address is not a Delhi address. All of them take the 40% share.
The gap is real money. Someone with basic plus DA of ₹7,20,000, HRA of ₹4,00,000 and rent of ₹6,00,000 has a third limit of ₹3,60,000 in Mumbai but only ₹2,88,000 in Bengaluru. The other two limits are identical in both cities, so the metro share binds and the exemption falls from ₹3,60,000 to ₹2,88,000 — ₹72,000 lost purely to the address. At the top old-regime slab of 30% plus 4% cess that is ₹22,464 of tax. A calculator that quietly treats Bengaluru as a metro hands you a number you cannot defend.
At moderate rents the distinction often does not bind at all. In the first worked example the exemption is ₹2,28,000 in a metro and ₹2,28,000 anywhere else, because the rent limit sits below both ₹3,60,000 and ₹2,88,000. Set the city selector both ways before you worry about it.
"Salary" here is a narrower thing than your salary
Two of the three limits are percentages of salary, so the definition carries the calculation. Salary here means basic pay plus dearness allowance, and the DA counts only where the terms of employment so provide — for most private employees it does not arise at all.
Almost every explanation of HRA adds "plus commission fixed as a percentage of turnover" to that definition. It does not belong there: the wording appears nowhere in Rule 2A or in the definition of salary it points to, and comes from the gratuity and provident fund context. On a commission-heavy sales package, including it inflates both percentage limits and produces an exemption you cannot support.
Everything else is excluded — special allowance, conveyance, leave travel allowance, bonus, the employer's provident fund contribution, reimbursements, and HRA itself. Private structures often hold basic at a third of gross, so somebody on ₹15 lakh gross may have salary of ₹5 lakh for this test, and both percentage limits shrink with it. Find the basic pay line on your payslip before using this page.
Under the new regime the exemption is worth nothing
HRA exemption is available under the old regime only, and the new regime is the default. For most salaried people filing today the figure above is not a saving but a comparison input: tax you would save if you chose the old regime. A large exemption is one of the few things still capable of tipping that choice, particularly on a high basic with metro rent — so subtract it from salary income along with your other old-regime deductions and run both regimes properly, rather than switching on the strength of one number.
Receipts, your landlord's PAN and the paperwork
The exemption is claimed on evidence, and payroll teams ask for it before the year closes. Expect to produce rent receipts, and a rent agreement where the amounts are substantial. Once rent for the year crosses ₹1,00,000 you must also report your landlord's PAN; if the landlord will not give it, a declaration is required instead and the claim weakens considerably.
Higher up, the obligation changes shape entirely. A tenant paying more than ₹50,000 a month has to deduct tax at source at 2% and deposit it — the provision numbered 194-IB under the Income-tax Act, 1961, and a rate cut from 5% with effect from 1 October 2024, so older articles will quote you the wrong figure. It is the tenant, not the landlord, who is liable if a deduction was due and was not made. Pay by bank transfer where you can: cash rent with handwritten receipts and no agreement is the pattern that gets picked apart.
If you pay rent but receive no HRA
Section 10(13A) needs an allowance to exempt, so someone self-employed, or whose salary carries no HRA component, gets nothing from it — the figure above will read nil. The route in that case is Section 80GG, a deduction rather than an exemption, claimed on a prescribed declaration and available only where neither you nor your spouse or minor child owns residential accommodation at the place you work.
It has its own three-limb cap, shaped like this one but with a far lower ceiling. The deduction is the least of three amounts: ₹5,000 a month, which is ₹60,000 across the year; 25% of total income; and rent paid less a share of total income. That last fraction is not among our sourced values, so confirm it before planning around the section. A ₹60,000 ceiling makes 80GG a consolation rather than a substitute, and it is unavailable under the new regime — like HRA, an old-regime route only.
What this calculator cannot tell you
It answers one question — the least of three amounts, on the figures you entered. A fair amount sits outside it:
- A year that changed. A raise, a move between cities, or a house taken up in September needs the exemption worked out period by period and summed.
- Whether your claim will stand. Genuine occupation, a real landlord and an auditable payment trail are facts, not inputs.
- Your tax. The exempt amount reduces taxable salary; what that is worth depends on your slab, your other income and your regime.
- Your tenant-side obligations. Deducting, depositing and certifying tenant TDS sit outside this page.
Used for what it is good for — checking a payroll exemption, sizing a rent negotiation, seeing whether a metro posting changes your answer at all — the three-limit test is short enough to verify by hand in a minute, which is more than can be said for most of the tax code.
Common questions
Is Bengaluru a metro for HRA?
No. For Section 10(13A) only Delhi, Mumbai, Kolkata and Chennai are metros, and the 50% limit applies nowhere else. Bengaluru, Hyderabad, Pune, Ahmedabad, Gurugram and Noida all sit at 40%, however expensive their rents have become and however often they are called metros elsewhere. Gurugram and Noida catch people out most: they are inside the National Capital Region but they are not Delhi, so the higher share does not reach them. If a calculator or a payroll system has treated your city as a metro, the exemption it produced is too high and the shortfall surfaces at assessment.
I am on the new regime. Should I still give my employer rent receipts?
For HRA alone, no — the exemption does not exist under the new regime, so receipts will not reduce a rupee of tax. They are still worth collecting for one reason: the old-versus-new comparison. A large exemption is one of the few things that can still tip a salaried taxpayer towards the old regime, and you cannot run that comparison without knowing what your exemption would have been. Work the number out once a year, keep the evidence, and switch only if the old regime wins on your full set of deductions.
Can I pay rent to my parents and claim the exemption?
Yes, if the arrangement is real. Your parents must actually own the property, you must genuinely occupy it, and the rent has to be paid — ideally by bank transfer, not cash. The rent then becomes taxable income in your parents' hands and they must declare it, which is where the saving often evaporates if they are in a similar bracket. A rent agreement, receipts and a payment trail are the difference between a claim that survives scrutiny and one that does not. Paying rent to a spouse for a jointly occupied home is a far weaker position.
Can I claim HRA and a home loan deduction at the same time?
They are separate provisions and can coexist, but only where the facts support both — typically where you own a property in one city and genuinely rent in another for work, or where the owned property is let out. What does not work is claiming rent on a house you own and occupy. If the owned home and the rented home are in the same city, expect the claim to be questioned and be ready to explain why living in your own property was not practical. Keep the two claims documented independently.
My employer did not process my rent declaration. Is the exemption lost?
The exemption is a matter of law rather than of payroll paperwork, so a claim can be made in the return even where Form 16 does not carry it. It is the weaker route, though: the return will not match the employer's statement, and mismatches are exactly what the department's processing looks for. If you take it, keep the rent agreement, the receipts, the bank debits and the landlord's details together, and expect to produce them. Declaring rent to your employer before the year closes is a great deal simpler.
Sources
Rates and rules on this page were read directly from the following sources on the dates shown. Figures change — if you are about to act on one, confirm it at the source.