HRA Exemption Calculator
Work out the tax-free part of your house rent allowance using the three-way HRA exemption rule.
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This calculator shows how much of your house rent allowance is tax-free and how much is added to your taxable salary. Salaried tenants can use it to check the HRA figure in Form 16 (Form 130 from Tax Year 2026-27), plan rent declarations, or decide whether the old tax regime is worth keeping.
The lowest-of-three rule
The tax-free HRA is the smallest of these three amounts, each counted for the period you lived in the rented house:
- The HRA your employer actually paid you.
- Rent you paid minus 10% of your salary.
- 50% of salary if you live in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad, and 40% anywhere else.
"Salary" here means basic pay, plus dearness allowance only if it counts for retirement benefits, plus commission fixed as a percentage of turnover; special allowance and bonus are left out. The rule moved from Section 10(13A) to section 11 and Schedule III of the Income-tax Act, 2025, with the amount set by Rule 279 of the Income-tax Rules, 2026. The Act also requires that you do not own the home you live in and that you really pay rent for it.
Bengaluru, Hyderabad, Pune and Ahmedabad now get 50%
From Tax Year 2026-27 (starting 1 April 2026), Rule 279 gives the 50% limit to eight cities; in FY 2025-26 only Delhi, Mumbai, Kolkata and Chennai qualified. The calculator's eight-city option is labelled "from Tax Year 2026-27", and a note under the result gives the FY 2025-26 rule. To check that year for one of the four new cities, pick "Any other city (40%)".
For a tenant living and working in Pune, with ₹50,000 basic, ₹25,000 HRA and ₹30,000 rent a month for 12 months:
| Limit | Tax Year 2026-27 | FY 2025-26 |
|---|---|---|
| 1. HRA received | ₹3,00,000 | ₹3,00,000 |
| 2. Rent minus 10% of basic | ₹3,00,000 | ₹3,00,000 |
| 3. Share of basic | ₹3,00,000 (50%) | ₹2,40,000 (40%) |
| Tax-free HRA | ₹3,00,000 | ₹2,40,000 |
Line 2 is ₹3,60,000 of rent minus ₹60,000 (10% of ₹6,00,000 basic). The whole ₹3 lakh is now exempt, against ₹2.4 lakh a year earlier. For someone in the 30% slab, that extra ₹60,000 exemption cuts tax by ₹18,720 including cess.
Filling in the fields
- Monthly basic salary + DA: from your payslip, not CTC or gross pay.
- HRA received per month and Rent paid per month: actual amounts, not what you declared to payroll in April.
- City you live in: where the rented house is. Rule 279 also refers to where you are employed, so with a home in one of the eight cities and an office outside it (say, Delhi and Gurugram), 40% is the safe choice until CBDT clarifies.
- Months you paid rent this year and Months you received HRA this year: both 12 by default.
The three limits use only months with both rent and HRA, while "Taxable HRA" covers all HRA received in the year. With ₹50,000 basic, ₹20,000 HRA and ₹25,000 rent in a 50% city, HRA all year and rent for 8 months, ₹1,60,000 is tax-free and ₹80,000 taxable: the HRA for the four months without rent, also shown on its own line.
The tool assumes basic, HRA and rent did not change during the year. After a raise or a move, run it for each period with both month boxes set to that period, and add the results. Treat the result as an estimate to plan with, not tax advice.
Which limit is holding your exemption down?
Calculator outputs for a full year:
| Monthly basic, HRA, rent | Tax-free a year | Limit that bites |
|---|---|---|
| ₹50,000, ₹20,000, ₹25,000 (50% city) | ₹2,40,000 | HRA and rent tie |
| ₹60,000, ₹24,000, ₹22,000 (50% city) | ₹1,92,000 | Rent |
| ₹40,000, ₹16,000, ₹18,000 (40% city) | ₹1,68,000 | Rent |
| ₹35,000, ₹14,000, ₹3,000 (40% city) | ₹0 | Rent below 10% of basic |
When rent is the binding limit, the rent that would make the whole HRA tax-free is your HRA plus 10% of basic, provided your HRA is no more than 50% of basic (40% outside the eight cities). In the second row that is ₹24,000 + ₹6,000 = ₹30,000 a month; at ₹22,000, ₹96,000 of HRA stays taxable. The last row shows why a token rent to a relative does nothing: rent has to exceed 10% of basic before any exemption starts.
Before you claim: regime, landlord PAN and paperwork
- The exemption exists only in the old regime, so compare your total tax both ways with the income tax calculator before counting on it.
- Owning a house elsewhere does not block HRA, because the condition is about the home you live in. If your own flat is in another city, you can claim HRA and home-loan interest together in the old regime.
- If rent for the year goes above ₹1 lakh, your employer will need the landlord's PAN, or a declaration with the landlord's name and address if they have none. Keep the rent agreement and receipts, and pay by bank transfer where you can.
- If your salary has no HRA component at all, a separate deduction for rent (80GG, now section 134) applies in the old regime. It is the least of ₹5,000 a month, 25% of total income, and rent minus 10% of total income, and it is not allowed if you, your spouse or minor child own a house where you live or work. The Income Tax Department's guide for salaried individuals explains it for FY 2025-26 under the 1961 Act.