HRA Exemption Calculator
Find out exactly how much of your House Rent Allowance is tax-free under Section 10(13A): the least of three rules, computed live for metro and non-metro cities (FY 2026-27, old regime).
Tax-free HRA (annual)
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| 1. Actual HRA received | — |
| 2. Rent paid − 10% of basic | — |
| 3. 50% of basic + DA | — |
| Exempt = least of the three | — |
HRA exemption applies only under the old tax regime. See whether it makes the old regime win for you in the in-hand salary calculator.
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How the HRA exemption works
House Rent Allowance is a salary component meant to cover rent, and under Section 10(13A) of the Income Tax Act, part of it can be completely tax-free if you actually pay rent. The exempt amount is the least of three limits: the HRA you receive, your rent minus 10% of basic + DA, and 50% (metro) or 40% (non-metro) of basic + DA. The rest of the HRA is taxed as normal salary.
Practical implication: if your rent is low relative to your basic salary (below 10% of basic), your exemption is zero, and if your HRA component is small, raising your rent doesn't help beyond it. When negotiating a salary structure, a bigger HRA component paired with real rent payments is one of the few remaining old-regime levers.
Frequently asked questions
How is HRA exemption calculated?
The tax-free portion of HRA is the least of three amounts: (1) actual HRA received from your employer, (2) rent paid minus 10% of basic salary + DA, and (3) 50% of basic + DA if you live in a metro (Delhi, Mumbai, Kolkata, Chennai) or 40% otherwise. Whatever HRA remains above that least amount is added to your taxable salary.
Can I claim HRA under the new tax regime?
No. HRA exemption under Section 10(13A) is available only in the old tax regime. If your HRA exemption is large (high rent in a metro), it is one of the strongest reasons the old regime can beat the new regime. Run both through our in-hand salary calculator to compare.
Can I claim HRA if I live with my parents?
Yes, if you genuinely pay them rent: pay by bank transfer, get rent receipts, and ideally have a rent agreement. Your parents must declare that rent as income in their tax returns. Paying rent to a spouse is generally not accepted.
Do I need my landlord’s PAN to claim HRA?
If your annual rent exceeds ₹1,00,000, you must report the landlord’s PAN to your employer to claim HRA through payroll. Also, if monthly rent exceeds ₹50,000, you are required to deduct TDS at 2% (Section 194-IB).
Is Bangalore / Hyderabad / Pune a metro for HRA?
No. For HRA purposes only Delhi, Mumbai, Kolkata and Chennai count as metros (50% of basic). Bangalore, Hyderabad, Pune, Gurgaon and all other cities use the 40% limit, even though rents there are metro-level.