HRA exemption calculator

The three-rule HRA formula

The tax-free part of HRA is the lowest of:

1. The HRA your employer actually pays you.
2. 50% of basic salary + DA if you live in a metro city, or 40% elsewhere.
3. Rent paid minus 10% of basic salary + DA.

Whatever HRA is left over is taxable. The calculator marks which rule is your limit.

What changed in 2026: eight metro cities

Under the Income-tax Rules, 2026, from 1 April 2026 the 50% limit applies to Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Before this, only the first four counted as metros. If you live in one of the four new cities and pay a good rent, your exemption can go up.

Worked example

Basic + DA ₹50,000 a month, HRA ₹20,000, rent ₹18,000 in Pune. Yearly: HRA received ₹2,40,000; 50% of basic ₹3,00,000; rent minus 10% of basic ₹2,16,000 − ₹60,000 = ₹1,56,000. The lowest is ₹1,56,000, which is tax-free. The remaining ₹84,000 of HRA is taxable.

Rules to keep in mind

• HRA exemption is available only in the old regime.
• If annual rent is over ₹1 lakh, you must give your employer the landlord’s PAN.
• Paying rent to parents is allowed if they own the house and declare the rent as income. Paying rent to your spouse is generally not accepted.
• If your employer does not pay HRA, you may claim a smaller deduction for rent (popularly called 80GG) in the old regime.

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