HRA Exemption Calculator
House Rent Allowance exemption under Section 10(13A) is not a flat percentage of your HRA. It is the smallest of three amounts, so the figure you can actually exempt depends on your salary, your rent, and your city together. Enter your monthly basic salary, the HRA on your payslip, and your rent, pick metro or non-metro, and this calculator shows your yearly exempt HRA, the taxable remainder, and which of the three conditions caps it. It is an educational estimate for the old tax regime, not tax advice.
Basic pay plus any dearness allowance. Not your full CTC or gross salary.
The HRA line on your salary slip.
What you actually pay your landlord each month.
For FY 2025-26, only Delhi, Mumbai, Kolkata, and Chennai are metro at 50%. From FY 2026-27 the government has moved to add Bengaluru, Hyderabad, Pune, and Ahmedabad; confirm the final rule with a CA.
Exempt HRA (per year)
₹1,80,000
About ₹15,000 a month exempt from tax.
- Taxable HRA (per year)
- ₹1,20,000
- What caps your exemption
- Condition C: your rent minus 10% of salary
Your exemption is the smallest of these three
Exempt HRA is the least of three amounts under Rule 2A: your actual HRA, 50% of salary in a metro city or 40% elsewhere, and rent paid minus 10% of salary. "Salary" means basic pay plus dearness allowance. HRA exemption applies only under the old tax regime. This is an educational estimate, not tax advice; your exact figure depends on your salary structure and documentation, so confirm it with a Chartered Accountant before you file.
How the calculator works
The calculator applies Rule 2A, the same least-of-three test the Income Tax Department uses. You enter three monthly figures, your basic salary plus dearness allowance, the HRA on your payslip, and your rent, then pick metro or non-metro. It annualises each figure, works out the three conditions, and takes the smallest as your exempt HRA. It then shows the taxable remainder and highlights which of the three conditions capped the number, the part a plain result usually hides. Remember that HRA exemption applies only under the old regime, so it is worth nothing if you file under the new default regime.
A worked example
Take Rohan in Bengaluru for FY 2025-26: basic plus DA of ₹60,000 a month, HRA of ₹30,000 a month, and rent of ₹40,000 a month. Annualised, condition A (actual HRA) is ₹3,60,000, condition B (40% of salary, because Bengaluru is non-metro this year) is ₹2,88,000, and condition C (rent minus 10% of salary) is ₹4,08,000. The smallest is B, so ₹2,88,000 is exempt and the remaining ₹72,000 of HRA is taxable. Switch the city toggle to metro, which Bengaluru is set to become from FY 2026-27, and condition B rises to ₹3,60,000, which makes his entire HRA exempt and drops the taxable portion to zero.
Which cities count as metro
For FY 2025-26, only four cities are metro for HRA and give the 50% rate: Delhi, Mumbai, Kolkata, and Chennai. Every other city, including Bengaluru, Hyderabad, Pune, Gurugram, and Noida, is non-metro at 40%. From FY 2026-27 (income earned on or after 1 April 2026), the government has moved to widen the 50% list to eight cities by adding Bengaluru, Hyderabad, Pune, and Ahmedabad under the Income-tax Rules 2026. That change does not touch the return you file in 2026, so this calculator defaults to the FY 2025-26 rule; treat the eight-city version as forward guidance and confirm it with a CA.
Is there a limit on HRA exemption?
There is no fixed rupee cap on HRA exemption. People search for a maximum expecting a single number, and there is not one. The cap is simply whichever of the three conditions works out smallest on your figures. A higher basic salary lifts condition B, higher rent lifts condition C, but the exemption can never exceed the HRA you were actually paid, which is condition A.
Pair this calculator with the guide
For the full rules behind the formula, including rent receipts, the landlord PAN requirement above ₹1 lakh a year, paying rent to parents, claiming HRA and a home loan together, and Section 80GG for renters who get no HRA, read the HRA exemption guide. Because HRA works only in the old regime, whether to keep the old regime at all is a separate calculation, laid out in which tax regime is cheaper for you.
Frequently asked questions
How is HRA exemption calculated?
HRA exemption is the least of three amounts under Rule 2A: (a) the actual HRA you receive, (b) 50% of salary if you live in a metro city or 40% if non-metro, and (c) the rent you pay minus 10% of salary. Salary here means basic pay plus dearness allowance. Whichever of the three is smallest is your exempt HRA, and the rest of the HRA you receive is taxable. The calculator above runs all three and highlights the one that caps your exemption.
Which cities are metro cities for the 50% HRA rate?
For FY 2025-26, the return you file in 2026, only four cities are metro at 50%: Delhi, Mumbai, Kolkata, and Chennai. Every other city, including Bengaluru, Hyderabad, Pune, Gurugram, and Noida, is non-metro at 40%. From FY 2026-27 (income from 1 April 2026), the government has moved to add Bengaluru, Hyderabad, Pune, and Ahmedabad to the 50% list under the Income-tax Rules 2026. Confirm the final notified position with a CA before relying on it.
Is there a maximum limit on HRA exemption?
No. There is no fixed rupee cap on HRA exemption. The most you can exempt is the least of the three formula amounts, so the ceiling moves with your salary, your rent, and your city. Your exemption can never be more than the HRA you actually received.
Can I claim HRA exemption under the new tax regime?
No. HRA exemption under Section 10(13A) applies only under the old tax regime. The new regime, which is the default from FY 2023-24, disallows HRA along with most other exemptions in exchange for lower slab rates. To claim HRA you must opt for the old regime when you file.
What salary is used in the HRA formula?
Basic pay plus dearness allowance that counts toward retirement benefits, plus any commission fixed as a percentage of turnover. Bonus, special allowances, perquisites, and reimbursements are left out. Condition C subtracts 10% of that same salary figure, not 10% of basic alone.
Sources
- Income Tax Department of India, Section 10(13A) and Rule 2A, incometax.gov.in
- Central Board of Direct Taxes (CBDT), metro city classification for HRA, incometaxindia.gov.in
- Business Standard, HRA relief expands to 8 cities from FY27, business-standard.com