How is HRA exemption calculated?

The exemption is the least of three amounts: (1) the actual HRA you receive from your employer, (2) the rent you pay minus 10% of your basic salary (plus DA where applicable), and (3) 50% of your basic salary if you live in a metro city (Delhi, Mumbai, Kolkata, Chennai) or 40% if you live anywhere else. Whichever of these three is smallest is your tax-exempt HRA; the rest of your HRA is added to taxable income. This calculator shows all three figures and highlights the binding one.

Which cities count as metro for HRA?

Only four cities count as metro for HRA purposes: Delhi, Mumbai, Kolkata, and Chennai. For these, the percentage-of-basic limit is 50%. Every other city in India — including large cities like Bengaluru, Hyderabad, Pune, and Ahmedabad — is treated as non-metro, where the limit is 40% of basic. This is a fixed statutory definition and does not change with city size or cost of living, so choosing the correct option matters for an accurate exemption.

Can I claim HRA exemption under the new tax regime?

No. The HRA exemption under Section 10(13A) is available only under the old tax regime. The new regime, which is now the default, does not allow it — along with most other exemptions and deductions. This is why renters with significant HRA often find the old regime worth considering despite its higher slab rates. To decide, compute your HRA exemption here, then enter it into the Income Tax Calculator to compare your total tax under both regimes.

What if I do not pay rent or pay very little?

If you pay no rent, you cannot claim any HRA exemption — the entire HRA is taxable. If you pay rent but it is less than 10% of your basic salary, the rent-minus-10% figure becomes zero or negative, which is treated as zero, so the least of the three is also zero and again the whole HRA is taxable. The exemption only kicks in once your rent meaningfully exceeds 10% of your basic salary, which is the law’s way of rewarding genuine rent expense.

Should I use monthly or annual figures?

Either works, as long as you are consistent. If you enter annual basic, annual HRA, and annual rent, you get the annual exemption — which is what you need for your tax return and for the Income Tax Calculator. If you enter monthly figures throughout, you get the monthly exemption. Do not mix the two: entering annual basic with monthly rent, for example, will produce a meaningless result. For tax filing, annual figures are usually the most convenient.

Is my salary and rent data stored anywhere?

No. The entire calculation runs in JavaScript inside your own browser. Nothing you enter — basic salary, HRA, or rent — is uploaded, logged, or stored on any server. The tool is free, needs no login, and closing the tab clears everything. The figures are informational and based on the Section 10(13A) rules for FY 2025-26; for filing, confirm with your employer, the Income Tax Department, or a chartered accountant.

Tax

HRA Exemption Calculator

Work out your tax-exempt House Rent Allowance under the old-regime least-of-three rule for FY 2025-26. Free, in your browser, nothing uploaded.

By the Samastam teamLast updated 2026-06-20Editorial standards

Salary & rent

Basic salary + DA (₹)

₹

Use annual figures throughout for an annual exemption, or monthly throughout. Keep all three inputs on the same basis.

HRA received (₹)

₹

Rent paid (₹)

₹

City type

Metro = Delhi, Mumbai, Kolkata, Chennai. Everywhere else is non-metro.

Least-of-three

Enter your basic salary and the HRA you receive on the left. The three competing figures and your exempt HRA appear here as you type.

An HRA exemption calculator works out how much of the House Rent Allowance in your salary is tax-free, and how much is added to your taxable income. The exemption is the least of three amounts: the actual HRA you receive, the rent you pay minus 10% of your basic salary, and 50% of basic (for metro cities) or 40% (for non-metro). Enter your basic-plus-DA, the HRA you receive, the rent you pay, and whether you live in a metro, and it shows all three figures and the exempt amount for FY 2025-26. This exemption applies under the old tax regime only. Everything runs in your browser, so nothing you enter is sent anywhere.

What this is and why it matters

House Rent Allowance is one of the most common components of an Indian salary, and one of the most misunderstood at tax time. It is not automatically tax-free. The Income Tax Act exempts only a part of it under Section 10(13A), calculated by a specific least-of-three rule, and only if you actually pay rent. The portion that exceeds the exemption is added to your taxable salary like any other income. Knowing the split between exempt and taxable HRA is what lets you plan your taxes and your rent accurately rather than guessing.

The rule itself compares three numbers and takes the smallest. The first is the actual HRA your employer pays you. The second is the rent you pay minus 10% of your basic salary (plus dearness allowance, where it counts for retirement benefits) — reflecting that the law only rewards rent above a baseline you are expected to bear yourself. The third is a flat 50% of your basic for the four metro cities, or 40% everywhere else. Because the exemption is the least of these, increasing any single one beyond the others gives you nothing extra — your exemption is capped by whichever number is smallest, which is exactly the insight a calculator makes visible.

This matters because HRA only helps under the old tax regime. The new regime, now the default, does not allow the HRA exemption at all, so anyone relying on HRA to reduce tax needs to weigh that against the new regime’s lower rates. Working out your exact HRA exemption is therefore the first step in deciding whether the old regime is still worth choosing — you feed this figure into your overall income-tax comparison, which is why this tool links directly to the full Income Tax Calculator.

How to use this tool

Enter your basic salary (plus DA). Type your annual basic salary, including dearness allowance if your DA forms part of retirement benefits. The 10% baseline and the 50%/40% cap are both calculated on this figure, so it is the single most important input. Use annual figures throughout for a yearly exemption, or monthly throughout for a monthly one — just keep all inputs on the same basis.

Enter the HRA you receive. Type the actual House Rent Allowance your employer pays you, as shown on your salary slip or Form 16. This is the absolute ceiling on your exemption — you can never exempt more HRA than you are actually paid, no matter how high your rent.

Enter the rent you pay and pick metro or non-metro. Type the rent you actually pay your landlord, then choose whether your rented home is in a metro city (Delhi, Mumbai, Kolkata, or Chennai) or elsewhere. Metro uses the 50% cap, non-metro uses 40%. The calculator immediately shows all three competing figures and highlights the least, which is your exemption.

Read the exempt and taxable split. The result shows your exempt HRA and the taxable remainder, along with the three values the rule compared so you can see which one is binding. Use the exempt figure in the old-regime deductions of the Income Tax Calculator to compare your total tax under both regimes.

Examples and use cases

A metro tenant where rent-minus-10% is the binding limit

A Mumbai employee has ₹6 lakh basic (annual), receives ₹3 lakh HRA, and pays ₹2.4 lakh rent. The three figures are: actual HRA ₹3,00,000; rent minus 10% of basic = ₹2,40,000 − ₹60,000 = ₹1,80,000; and 50% of basic = ₹3,00,000. The least is ₹1,80,000, so that is exempt and the remaining ₹1,20,000 of HRA is taxable. Here the rent-minus-10% figure binds — paying more rent would raise the exemption until another limit takes over.

A non-metro tenant capped by the 40% rule

A Jaipur employee has ₹5 lakh basic, receives ₹2.5 lakh HRA, and pays ₹3 lakh rent. The figures are: actual HRA ₹2,50,000; rent minus 10% = ₹3,00,000 − ₹50,000 = ₹2,50,000; and 40% of basic (non-metro) = ₹2,00,000. The least is ₹2,00,000, so the 40% cap binds and ₹50,000 of HRA stays taxable — a reminder that high rent alone cannot push the exemption past the percentage-of-basic ceiling.

Low rent makes the whole HRA taxable

A Pune employee with ₹6 lakh basic receives ₹1.5 lakh HRA but pays only ₹50,000 rent. Rent minus 10% of basic = ₹50,000 − ₹60,000, which is negative and treated as zero. Because the least of the three is zero, the entire ₹1.5 lakh HRA is taxable. This shows the rule’s logic: if your rent does not even exceed 10% of basic, the law grants no exemption at all.

Feeding the result into the regime comparison

A Delhi employee computes an HRA exemption of ₹2.2 lakh. On its own that is just a number — its value is as a deduction under the old regime. Entering ₹2,20,000 in the HRA field of the Income Tax Calculator, alongside 80C and other deductions, shows whether the old regime’s total tax beats the new regime for this salary. HRA is often the single largest old-regime deduction for renters, so it frequently decides which regime wins.

Frequently asked questions

How is HRA exemption calculated?: The exemption is the least of three amounts: (1) the actual HRA you receive from your employer, (2) the rent you pay minus 10% of your basic salary (plus DA where applicable), and (3) 50% of your basic salary if you live in a metro city (Delhi, Mumbai, Kolkata, Chennai) or 40% if you live anywhere else. Whichever of these three is smallest is your tax-exempt HRA; the rest of your HRA is added to taxable income. This calculator shows all three figures and highlights the binding one.
Which cities count as metro for HRA?: Only four cities count as metro for HRA purposes: Delhi, Mumbai, Kolkata, and Chennai. For these, the percentage-of-basic limit is 50%. Every other city in India — including large cities like Bengaluru, Hyderabad, Pune, and Ahmedabad — is treated as non-metro, where the limit is 40% of basic. This is a fixed statutory definition and does not change with city size or cost of living, so choosing the correct option matters for an accurate exemption.
Can I claim HRA exemption under the new tax regime?: No. The HRA exemption under Section 10(13A) is available only under the old tax regime. The new regime, which is now the default, does not allow it — along with most other exemptions and deductions. This is why renters with significant HRA often find the old regime worth considering despite its higher slab rates. To decide, compute your HRA exemption here, then enter it into the Income Tax Calculator to compare your total tax under both regimes.
What if I do not pay rent or pay very little?: If you pay no rent, you cannot claim any HRA exemption — the entire HRA is taxable. If you pay rent but it is less than 10% of your basic salary, the rent-minus-10% figure becomes zero or negative, which is treated as zero, so the least of the three is also zero and again the whole HRA is taxable. The exemption only kicks in once your rent meaningfully exceeds 10% of your basic salary, which is the law’s way of rewarding genuine rent expense.
Should I use monthly or annual figures?: Either works, as long as you are consistent. If you enter annual basic, annual HRA, and annual rent, you get the annual exemption — which is what you need for your tax return and for the Income Tax Calculator. If you enter monthly figures throughout, you get the monthly exemption. Do not mix the two: entering annual basic with monthly rent, for example, will produce a meaningless result. For tax filing, annual figures are usually the most convenient.
Is my salary and rent data stored anywhere?: No. The entire calculation runs in JavaScript inside your own browser. Nothing you enter — basic salary, HRA, or rent — is uploaded, logged, or stored on any server. The tool is free, needs no login, and closing the tab clears everything. The figures are informational and based on the Section 10(13A) rules for FY 2025-26; for filing, confirm with your employer, the Income Tax Department, or a chartered accountant.