HRA exemption calculator
How much of my HRA is tax-free?
₹84,000 of your HRA is taxed as salary · saves ₹48,672 of tax at 30% in the old regime
The three limits (the smallest wins)
- HRA received₹2,40,000
- Rent paid less 10% of basic + DABinding₹1,56,000
- 40% of basic + DA₹2,40,000
How this is calculated
Rules checked against their sources on 29 September 2026. Tax year FY2026-27.
The rule in one line
House rent allowance is a part of salary, and the part of it that is tax-free is the least of three amounts: the HRA you actually receive, the rent you pay less 10% of your basic and dearness allowance, and 50% of basic and DA if you live in Delhi, Mumbai, Kolkata or Chennai, 40% anywhere else. Whatever is left of the HRA after the exemption is taxed as salary. The exemption exists only in the old regime.
The three legs, and which one bites
For most people the rent leg is the one that binds: rent minus 10% of basic. Raising rent raises the exemption rupee for rupee until the HRA received or the share-of-basic ceiling takes over. If the share-of-basic leg binds, no amount of rent helps; only a higher basic or a metro posting would. The calculator names the binding leg and, when rent is the limit, the rent at which the whole HRA would be exempt.
The paperwork
Rent receipts for any claim; the landlord's PAN when rent exceeds ₹1 lakh a year (a declaration if they have no PAN); and when rent exceeds ₹50,000 a month, you must deduct 2% TDS under Section 194-IB once a year and deposit it with Form 26QC. Employers apply the exemption in TDS only if you submit these; otherwise you claim it in the return, which invites a notice if the figures do not match.
Paying rent to parents
Allowed, and often sensible, if the arrangement is real: the house is theirs, you actually pay, ideally by bank transfer, and they declare the rent as income (with the 30% standard deduction on house property, it is usually taxed lightly). Rent to a spouse is generally disallowed. Rent for a house you own yourself is never allowed.
Old regime only
Because HRA is often the largest single deduction, it is the one that most often tips the choice of regime for renters in expensive cities. The income-tax calculator on this site takes the exemption computed here and shows whether it is enough for the old regime to win.
Questions people ask
- Does HRA work in the new regime?
- No. The exemption under Section 10(13A) is not available under Section 115BAC. If the new regime is cheaper even after HRA, take it and ignore HRA; if HRA tips the balance, opt for the old regime at filing.
- Which cities count as metro?
- Only Delhi, Mumbai, Kolkata and Chennai, as Rule 2A has stood since 1962. Bengaluru, Hyderabad, Pune, Ahmedabad and Gurugram are 40% cities for HRA, however expensive they are.
- What if I get no HRA?
- Section 80GG allows a deduction of the least of ₹5,000 a month, 25% of total income, and rent less 10% of income, if neither you nor your spouse owns a house in the city. It is also old-regime only.
- Can I claim HRA and a home-loan deduction together?
- Yes, if you genuinely rent in one city and own a home elsewhere (or your own home is let out). Both are old-regime deductions. Claiming rent on your own home is not allowed.
- Is the calculation yearly or monthly?
- Strictly month by month, since rent, HRA and basic can change during the year. With the same figures all year the annual computation gives the same answer, which is what this page does; enter fewer months if you rented for part of the year.
Want the whole picture?
A free Eazyretire plan puts this number next to your income, savings and spending and tells you whether your money lasts to the age you plan for, and what to change if it will not.