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HRA Calculator

House rent allowance exemption

Reviewed by the PaisaTools Editorial Team · Last reviewed September 2026 · Applicable to FY 2026-27 (AY 2027-28)

How to use: Pick metro or non-metro, then enter your monthly basic, HRA, and rent.

ExampleBasic ₹50k, HRA ₹20k, rent ₹18k (metro) → ₹1.56 lakh/yr exempt

Which city do you live in?

From tax year 2026-27, the 50% rule covers eight cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Everywhere else is 40%. (For FY 2025-26 salary, only the first four.)

₹

Basic + DA from your payslip

₹

The HRA line on your payslip

₹

What you actually pay your landlord

Tax-exempt HRA (per year)

₹1,56,000

Exempt / month

₹13,000

Taxable HRA / year

₹84,000

Exempt vs taxable HRA (per year)

  • Tax-exempt₹1,56,00065%
  • Taxable₹84,00035%

How it's decided

Your exemption is the smallest of these three (per year):

  • Actual HRA received₹2,40,000
  • Rent paid − 10% of basicLowest → applies₹1,56,000
  • 50% of basic salary₹3,00,000

HRA exemption lowers your taxable income if you live in a rented home and get HRA as part of your salary (old tax regime only). The exempt amount is the smallest of three legal limits — the calculator computes all three and shows which one caps your exemption.

The most common cap is “rent − 10% of basic,” so paying real rent matters. To actually claim it, keep rent receipts (and your landlord's PAN if rent crosses ₹1 lakh/year).

The exemption is the least of three amounts — actual HRA received, rent paid minus 10% of salary, and 50% (metro) or 40% (non-metro) of salary — as defined under Section 10(13A) of the Income Tax Act and Rule 2A of the Income-tax Rules, 1962, now carried into the Income-tax Rules, 2026 — which, from tax year 2026-27, extend the 50% limit to Bengaluru, Hyderabad, Pune and Ahmedabad. HRA exemption applies only under the old tax regime.

  • Applies under the old regime only; the new regime allows no HRA exemption.
  • The 50% city list changed from tax year 2026-27 (eight cities, up from four); pick the right one for the year you are computing.
How is HRA exemption calculated?
Your exemption is the least of three: (1) actual HRA received, (2) rent paid minus 10% of basic salary, (3) 50% of basic for metro cities or 40% for non-metro. This calculator shows all three and highlights the one that applies.
Which cities count as metro for HRA?
From tax year 2026-27 (salary from 1 April 2026), the Income-tax Rules, 2026 apply the 50% limit in eight cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Every other city is 40%. For FY 2025-26 salary — the return filed in 2026 — only Delhi, Mumbai, Kolkata and Chennai count.
Does HRA exemption apply in the new tax regime?
No. HRA exemption under Section 10(13A) (Schedule III of the new Income-tax Act, 2025) is only available in the old tax regime. If you've opted for the new regime, HRA is fully taxable.
Do I need rent receipts?
Yes, to claim HRA. If annual rent exceeds ₹1,00,000 you also need your landlord's PAN. You can generate receipts with our Rent Receipt Generator.
Can I claim HRA if I live with my parents?
Yes, if you actually pay them rent and they declare it as income. Keep proof (bank transfers + receipts).

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