Free HRA Calculator
Enter your salary details to calculate your HRA tax exemption.
* HRA exemption is available only under the old tax regime. This is an estimate — verify with your Form 16 and rent receipts.
What Is HRA (House Rent Allowance)?
House Rent Allowance (HRA) is a salary component paid by employers to help cover an employee's rental accommodation costs. A portion of HRA is exempt from income tax under Section 10(13A) of the Income Tax Act, provided the employee actually pays rent and doesn't own the house they live in.
HRA Exemption Formula
The HRA exemption is the lowest of these three values:
2. Rent paid − 10% of (Basic + DA)
3. 50% of (Basic + DA) for metro cities, 40% for non-metro
Example: Basic + DA = ₹6,00,000/year, HRA received = ₹2,40,000/year, rent paid = ₹1,80,000/year, living in a metro city.
- Actual HRA received = ₹2,40,000
- Rent paid − 10% of basic = ₹1,80,000 − ₹60,000 = ₹1,20,000
- 50% of basic (metro) = ₹3,00,000
The lowest of these three is ₹1,20,000 — that's the tax-exempt HRA. The remaining ₹1,20,000 of HRA received (₹2,40,000 − ₹1,20,000) is taxable.
Quick Reference: HRA Exemption by Salary (Metro City)
Assumes HRA received = 40% of basic, rent paid = 30% of basic, metro city.
| Basic + DA (Annual) | HRA Received | Rent Paid | HRA Exemption |
|---|---|---|---|
| ₹3,00,000 | ₹1,20,000 | ₹90,000 | ₹60,000 |
| ₹4,00,000 | ₹1,60,000 | ₹1,20,000 | ₹80,000 |
| ₹5,00,000 | ₹2,00,000 | ₹1,50,000 | ₹1,00,000 |
| ₹6,00,000 | ₹2,40,000 | ₹1,80,000 | ₹1,20,000 |
| ₹8,00,000 | ₹3,20,000 | ₹2,40,000 | ₹1,60,000 |
| ₹10,00,000 | ₹4,00,000 | ₹3,00,000 | ₹2,00,000 |
In this scenario the "rent paid − 10% of basic" component is always the binding (lowest) constraint. Use the calculator above with your actual figures for a precise result.
Is HRA Exemption Available in the New Tax Regime?
No. HRA exemption under Section 10(13A) is available only under the old tax regime. If you choose the new tax regime, your entire HRA amount becomes part of your taxable salary — you cannot claim any exemption regardless of actual rent paid.
This is a key factor when deciding between tax regimes: if you pay significant rent, especially in a metro city, the old regime combined with HRA exemption often results in lower total tax than the new regime's lower slab rates. Use our Salary Calculator to compare both regimes for your exact numbers.
Frequently Asked Questions
How is HRA exemption calculated?
HRA exemption is the lowest of: (1) actual HRA received, (2) rent paid minus 10% of basic salary + DA, or (3) 50% of basic salary for metro cities (40% for non-metro). The remaining HRA received is added to taxable income.
Can I claim HRA exemption without paying rent to a landlord?
No, HRA exemption requires actual rent payment. If you own your home and live in it, you cannot claim HRA exemption. If you pay rent to a family member (like a parent), you can claim it, but rent receipts and the landlord's PAN (if annual rent exceeds ₹1,00,000) are required for verification.
What cities count as "metro" for HRA calculation?
Only four cities are classified as metro for HRA purposes: Delhi, Mumbai, Kolkata, and Chennai. All other cities, including Bangalore, Hyderabad, and Pune, are treated as non-metro (40% exemption cap instead of 50%).
Is HRA exemption available under the new tax regime?
No. HRA exemption is only available under the old tax regime. Under the new tax regime (the default since FY 2023-24), the full HRA amount is taxable with no exemption.
Do I need rent receipts to claim HRA exemption?
Yes. Employers typically require rent receipts to process HRA exemption in payroll. If annual rent exceeds ₹1,00,000, you must also provide the landlord's PAN. Without documentation, employers may deduct TDS as if no exemption applies, though you can still claim it later while filing your ITR.
