HRA Exemption Calculator
Work out exempt and taxable HRA with the three-limit rule and the new 8 metro cities
| Rule | Amount for 12 months | |
|---|---|---|
| 1. HRA actually received | ₹2,40,000 | |
| 2. Rent paid minus 10% of salary | ₹1,56,000 | ✓ lowest |
| 3. 40% of salary (non-metro) | ₹2,40,000 |
Runs entirely in your browser. Nothing you type or upload is sent to us or stored.
Tax estimate based on the rules described on this page, not tax advice. Rules change every year, so confirm with a chartered accountant or the Income Tax Department before you file or plan. Terms of use
How to Use
- Choose the financial year (the list of 50% cities changed on 1 April 2026) and whether you're entering amounts per month or per year.
- Enter your basic salary, any DA that counts for retirement benefits, the HRA you receive and the rent you pay.
- For monthly amounts, set how many months you paid rent this year (for example, 8 if you moved into a rented flat in August).
- Select the city where your rented home is. The eight 50% cities are listed by name; choose “Any other city” for everywhere else.
- The exempt HRA updates as you type. The table shows all three limits and marks the lowest one, which is your exemption; the rest of your HRA is taxable.
How HRA exemption works
If your salary includes a house rent allowance (HRA) and you live in a rented home, part of that allowance can be tax-free. This HRA exemption calculator works it out. The exempt part is the lowest of three amounts, each worked out for the period you lived in the rented home. The rule used to be in section 10(13A) and rule 2A; from 1 April 2026 it's in section 11 and Schedule III of the Income-tax Act, 2025, read with rule 279 of the Income-tax Rules, 2026. The three-way formula did not change.
1. HRA actually received
2. Rent paid − 10% of salary
3. 50% of salary (listed cities) or 40% of salary (elsewhere)
Salary = basic + DA (if DA counts for retirement benefits)
Whatever is left of your HRA after the exemption is added to your taxable salary.
Which cities get 50%?
| Financial year | 50% of salary | 40% of salary |
|---|---|---|
| Up to FY 2025-26 | Mumbai, Delhi, Kolkata, Chennai | All other places |
| FY 2026-27 onwards | Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad | All other places |
The Income-tax Rules, 2026 (rule 279) added Bengaluru, Hyderabad, Pune and Ahmedabad from 1 April 2026. Neighbouring cities such as Gurugram, Noida, Navi Mumbai and Thane aren't named in the rule, so they're generally treated as 40% cities. What matters is where the rented home is, not where your office is.
Worked example
Priya lives in a rented flat in Bengaluru. Her basic is ₹50,000 a month, HRA ₹20,000 a month and rent ₹18,000 a month, for all 12 months of FY 2026-27. Her salary for the year is ₹6,00,000.
| Rule | Calculation | Amount |
|---|---|---|
| 1. HRA received | ₹20,000 × 12 | ₹2,40,000 |
| 2. Rent − 10% of salary | ₹2,16,000 − ₹60,000 | ₹1,56,000 |
| 3. 50% of salary (Bengaluru) | 50% × ₹6,00,000 | ₹3,00,000 |
Her exempt HRA is ₹1,56,000 and the remaining ₹84,000 is taxable. Here the rent rule sets the limit, so paying more rent would raise it, and the city change made no difference to her. The city matters when rent is high compared with salary: with a basic of ₹30,000, HRA of ₹15,000 and rent of ₹25,000 a month in Pune, the exemption is ₹1,80,000 in FY 2026-27 but only ₹1,44,000 in FY 2025-26, when Pune was a 40% city.
Things to know before you claim
- Old regime only. The new regime (the default) gives no HRA exemption. Compare both regimes with our income tax calculator before you decide.
- Landlord's PAN is needed if your rent is more than ₹1 lakh a year. Keep rent receipts and the rent agreement; the 2026 rules also ask you to declare your relationship with the landlord.
- Rent paid to parents can qualify if it's genuinely paid and they show it as income. Rent paid to your spouse is usually not accepted.
- No rent, no exemption. If you live in your own house, all of your HRA is taxable. If you pay rent but don't get HRA, look at the separate deduction for rent paid (formerly section 80GG).
- Rent ≤ 10% of salary gives a zero exemption, because rule 2 becomes nil.
- If your salary or rent changed during the year, work out each period separately and add them up.
Rules as per the Income-tax Act, 2025 and Income-tax Rules, 2026 (rule 279), checked October 2026. This calculator gives an estimate; your employer's payroll or a tax professional can confirm your claim.