HRA Exemption Calculator

Your HRA exemption is the lowest of three amounts: the HRA you actually receive, your rent minus 10% of salary, and 50% of salary in Delhi, Mumbai, Kolkata or Chennai — 40% everywhere else. Enter your figures below to see all three.

Which city do you rent in?

Exempt from tax

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Fill in basic salary, HRA received, and rent paid.

Your exemption is the lowest of these three

  • Actual HRA received—
  • Rent paid minus 10% of salary—
  • 40% of salary (non-metro)—

HRA exemption applies under the old tax regime only. Under the new regime it is not available. This is a guide, not tax advice — check with your employer or a CA.

How HRA exemption works

House Rent Allowance is part of most salary packages in India, and under Section 10(13A) of the Income Tax Act a portion of it is exempt from tax if you actually pay rent. You cannot claim it if you live in a home you own, and it is available under the old tax regime only — the new regime trades it for lower slab rates.

Rule 2A sets three limits, and your exemption is whichever is smallest. In practice the second one — rent paid minus 10% of salary — is usually the binding limit for people paying market rent, which is why a higher rent generally raises your exemption until one of the other two caps takes over.

The metro rule catches almost everyone out

For HRA, “metro” is a legal definition rather than the everyday one: only Delhi, Mumbai, Kolkata and Chennai qualify for the 50% limit. Bengaluru, Hyderabad, Pune, Gurugram and Noida are all non-metro at 40%, however large or expensive they are. Using 50% for a Bengaluru rental is the single most common error in HRA calculations, and it inflates the exemption you claim.

What you need to keep

Keep your rent receipts and your rent agreement — employers ask for both. Once your rent passes ₹1,00,000 for the year, your employer must also collect your landlord’s PAN. Paying by bank transfer rather than cash makes every one of these claims easier to evidence.

Next steps

Rent agreement guide

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HRA exemption — FAQs

How is HRA exemption calculated?

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Your exempt HRA is the lowest of three amounts: the actual HRA your employer pays you, the rent you pay minus 10% of your salary, and 50% of salary if you rent in Delhi, Mumbai, Kolkata or Chennai (40% anywhere else). Here "salary" means basic pay plus dearness allowance. Whatever is left after the exemption is added to your taxable income.

Is Bangalore a metro city for HRA?

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No. For HRA purposes the Income Tax Act recognises only four metros — Delhi, Mumbai, Kolkata and Chennai. Bengaluru, Hyderabad, Pune, Gurugram, Noida and every other city are treated as non-metro, so the limit is 40% of salary rather than 50%. This is the most common mistake people make when calculating HRA.

Can I claim HRA under the new tax regime?

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No. HRA exemption is available only under the old tax regime. If you opt for the new regime you pay lower slab rates but give up the HRA exemption, so it is worth calculating your tax both ways before choosing.

Do I need my landlord’s PAN to claim HRA?

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Only if you pay more than ₹1,00,000 in rent in a financial year. Above that threshold your employer must collect the landlord’s PAN along with your rent receipts. Below it, rent receipts alone are normally enough.

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

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Yes, provided the arrangement is genuine. Your parents must actually own the property, you must actually pay the rent (a bank transfer is far better evidence than cash), and they must declare that rent as income in their own return. You cannot claim HRA for a property you own yourself.

Can I claim both HRA and a home loan deduction?

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Yes, in the right circumstances — for example if you own a home in one city and genuinely rent in another for work, or your own property is let out. The two are separate provisions, but claiming both on the same self-occupied property will not hold up.