Calculate Your HRA Exemption

Basic Salary (Annual) (₹) Required

Dearness Allowance (Annual) (₹) Optional

HRA Received (Annual) (₹) Required

Rent Paid (Annual) (₹) Required

City Type

Metro (50%) Non-Metro (40%)

HRA Exempt

Taxable HRA

Tax Saved (est.)

HRA Exemption Breakdown

What is HRA (House Rent Allowance)?

House Rent Allowance (HRA) is a component of salary paid by employers to employees to meet rental expenses. Under Section 10(13A) of the Income Tax Act, a portion of HRA is exempt from tax if you live in rented accommodation.

HRA Exemption Rules

The HRA exemption is the minimum of these three amounts:

Actual HRA received from your employer
50% of (Basic + DA) for metro cities, or 40% of (Basic + DA) for non-metro cities
Actual rent paid minus 10% of (Basic + DA)

For FY 2025-26 (returns filed in 2026), the metro cities for HRA are Delhi, Mumbai, Chennai, and Kolkata. From Tax Year 2026-27, the Income-tax Rules, 2026 add Bengaluru, Pune, Hyderabad, and Ahmedabad, so eight cities get the 50% limit — choose Metro for these cities when you plan for 2026-27. All other cities follow the 40% rule.

HRA Calculation Formula

HRA Exempt = MIN(Actual HRA, 50%/40% of Salary, Rent - 10% of Salary)

Where Salary = Basic + DA (Dearness Allowance forming part of salary)

Example Calculation

For a salaried employee in Mumbai:

Basic + DA = ₹6,00,000/year
HRA received = ₹2,40,000/year
Rent paid = ₹15,000/month (₹1,80,000/year)

Calculation:

Actual HRA = ₹2,40,000
50% of salary = ₹3,00,000 (metro)
Rent - 10% of salary = ₹1,80,000 - ₹60,000 = ₹1,20,000

HRA Exempt = ₹1,20,000 (minimum of the three). Taxable HRA = ₹2,40,000 - ₹1,20,000 = ₹1,20,000.

Tips to Maximize HRA Tax Benefit

Restructure your salary: Request a higher HRA component from your employer. A higher HRA with proportionally higher rent payments can increase exemption.
Pay rent to parents: If you live with your parents, you can pay them rent and claim HRA exemption. Ensure the rent is credited to their bank account and they declare it as income.
Keep rent receipts: For HRA above ₹3,000/month, rent receipts are required. For annual rent above ₹1,00,000, landlord's PAN is mandatory.
Section 80GG alternative: If you don't receive HRA but pay rent, you can claim up to ₹5,000/month under Section 80GG.
Old regime only: HRA exemption is not available under the new tax regime. Compare both regimes before choosing.

Related Calculators

Frequently Asked Questions

HRA exemption is the minimum of three amounts: (1) Actual HRA received from employer, (2) 50% of basic salary + DA for metro cities or 40% for non-metro, (3) Actual rent paid minus 10% of basic salary + DA. You get the lowest of these three as tax-exempt.

For FY 2025-26, four cities count as metro for HRA: Delhi, Mumbai, Chennai, and Kolkata. From Tax Year 2026-27, the Income-tax Rules, 2026 add Bengaluru, Pune, Hyderabad, and Ahmedabad, making eight metro cities that get the 50% limit. Every other city gets 40%.

Yes, you can claim HRA exemption even if you own a house, provided you live in a rented accommodation. For example, if your house is in a different city or you've let it out, you can still claim HRA for the rented house you live in. You can also claim both HRA and home loan benefits simultaneously.

Yes, you can pay rent to your parents and claim HRA exemption. Ensure: (1) there's a rental agreement, (2) rent is transferred via bank, (3) your parent declares the rental income in their ITR. This is a legitimate tax-saving method widely used in India.

No. HRA exemption under Section 10(13A) is only available under the old tax regime. If you choose the new tax regime, you cannot claim HRA exemption. Compare both regimes to see which saves more tax overall.

You need: (1) Rent receipts for rent above ₹3,000/month, (2) Landlord's PAN if annual rent exceeds ₹1,00,000, (3) Rental agreement (recommended), (4) Bank transfer proof of rent payments. Keep these for at least 6 years after filing.