HRA Exemption Calculator
Find out how much of your house rent allowance (HRA) is tax-free. Enter your monthly basic salary, HRA and rent, and choose the city you live in.
More options: tax year and tax saved
₹2,40,000 of your ₹2,40,000 yearly HRA is tax-free. Rent above ₹24,000 a month does not increase your exemption.
Your rent is above ₹1 lakh a year, so you need to give your employer your landlord’s PAN.
HRA exemption is available only in the old tax regime. Assumes you received HRA and paid rent for all 12 months.
What is HRA exemption?
House rent allowance (HRA) is the part of your salary your employer pays towards rent. If you live in a rented home and choose the old tax regime, part or all of it is tax-free. The rule was Section 10(13A) of the Income-tax Act, 1961, and continues under the Income-tax Act, 2025 from Tax Year 2026-27. In the new tax regime, all HRA is taxable.
How the exemption is calculated
The tax-free HRA is the lowest of:
- The HRA you actually received
- 50% of basic + DA in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad; 40% in any other city
- Rent paid minus 10% of basic + DA
Worked example
Basic salary ₹40,000 a month, HRA ₹20,000 a month, rent ₹25,000 a month, living in Bengaluru, Tax Year 2026-27:
- HRA received: ₹20,000 × 12 = ₹2,40,000
- 50% of basic: 50% × ₹4,80,000 = ₹2,40,000
- Rent minus 10% of basic: ₹3,00,000 − ₹48,000 = ₹2,52,000
- Lowest = ₹2,40,000, so all of the HRA is tax-free. At the 30% slab, that saves ₹74,880 in tax (with cess).
For FY 2025-26, Bengaluru counted at 40%, so the same salary would have given ₹1,92,000 tax-free, ₹48,000 less. The move to eight cities saves this employee ₹14,976 a year at the 30% slab.
How much rent counts
Only rent up to a point helps. In the example, rent above ₹24,000 a month does not increase the exemption, because the HRA received and 50% of basic are both capped at ₹2,40,000. The calculator shows this limit for your figures. If you pay less rent than that, the third rule is the lowest and you are taxed on part of your HRA.
Documents and rules
- Rent receipts or a rent agreement, given to your employer when they ask for investment proofs.
- Landlord’s PAN if your rent is more than ₹1 lakh a year.
- Relationship to the landlord: from Tax Year 2026-27, you must declare it when you claim HRA.
- If your employer did not count your HRA, you can still claim it when you file your tax return, as long as you are in the old regime.
When to use a different calculator
- Deciding between the old and new regime? Use the Income Tax Calculator.
- Want to see your monthly take-home pay? Use the In-Hand Salary Calculator.
