HRA Exemption Calculator
Find the exempt portion of your House Rent Allowance using the least-of-three rule (metro and non-metro rates).
India-specific calculator. It uses Indian rules, rates and rupee amounts, and the currency selector is switched off on this page.
The HRA exemption calculator works out how much of your House Rent Allowance is tax-free. Under the old tax regime, the exempt amount is the least of three values: the HRA you actually receive, the rent you pay minus 10% of your salary, and 50% (metro) or 40% (non-metro) of your salary. Only that smallest figure escapes tax.
How to use the calculator
- Enter your basic salary plus DA per month — HRA rules use this figure, not your full CTC.
- Enter the HRA shown on your payslip.
- Enter the rent you actually pay each month.
- Select whether your city is a metro (Delhi, Mumbai, Kolkata, Chennai) or not.
- Press Calculate Exemption to see the monthly and annual exemption and the taxable portion.
HRA exemption formula
1) Actual HRA received
2) Rent paid − 10% of (basic + DA)
3) 50% of (basic + DA) in metro cities, else 40%
Worked example
Basic + DA ₹50,000, HRA ₹20,000, rent ₹15,000, Delhi (metro)
Test 1 = ₹20,000 · Test 2 = 15,000 − 5,000 = ₹10,000 · Test 3 = 50% of 50,000 = ₹25,000
Exemption = lowest = ₹10,000 per month (₹1,20,000 a year); the remaining ₹10,000 of HRA is taxable.
Keep rent receipts and, if annual rent exceeds ₹1,00,000, your landlord's PAN is required. HRA exemption is not available under the new tax regime.
Who should use this calculator
- Salaried employees paying rent and declaring HRA to reduce taxable income under the old regime.
- Anyone who has just moved cities for work and wants to know how much of the rent is effectively tax-free.
- People negotiating a salary structure and deciding how much to allocate to HRA versus special allowance.
- Tenants whose annual rent is close to ₹1,00,000, where the landlord PAN requirement starts to matter.
Common mistakes to avoid
- Using CTC instead of basic + DA. HRA rules apply to basic salary plus dearness allowance, which is usually much smaller than your gross salary — using the wrong figure overstates your exemption.
- Treating every big city as a metro. For HRA only Delhi, Mumbai, Kolkata and Chennai qualify for the 50% limit. Bengaluru, Hyderabad and Pune fall in the 40% category.
- Not keeping rent receipts. The exemption needs evidence. If annual rent crosses ₹1,00,000, your landlord's PAN is required as well.
- Claiming HRA under the new regime. The new regime does not allow HRA exemption at all, so rent gives you no tax benefit there.
- Claiming both HRA and full home loan interest on the same property. If you live in the house you own, you cannot claim rent for it. The two benefits apply to different situations.
The least-of-three test, in plain words
Your exemption is the smallest of three numbers: the HRA you actually receive, the rent you pay minus 10% of your salary, and 50% (metro) or 40% (non-metro) of your salary. Whichever is smallest is the amount that escapes tax; the rest of your HRA is taxable.
In practice the second test is the one that limits most people. If your basic plus DA is ₹50,000 and your rent is ₹15,000, then rent minus 10% of salary is ₹10,000 — so even if you receive ₹20,000 of HRA, only ₹10,000 is exempt. Claiming the full ₹20,000 would be a mistake that catches up with you at assessment.
HRA terms explained
- Basic + DA
- The salary base HRA rules use. It is far smaller than your gross salary, which is why HRA exemption is often lower than people expect.
- Metro city
- For HRA only Delhi, Mumbai, Kolkata and Chennai — these get the 50% limit instead of 40%.
- Rent receipts
- Proof of rent paid. Keep them, and add the landlord's PAN when annual rent exceeds ₹1,00,000.
- Section 80GG
- A deduction for people who pay rent but receive no HRA, subject to its own limits.
- Taxable HRA
- The part of your HRA that is not exempt. It is simply added to your taxable income.
Frequently asked questions
How is HRA exemption calculated?
The exempt portion of HRA is the least of three amounts: (1) the actual HRA you receive, (2) rent paid minus 10% of your salary (basic + DA), and (3) 50% of salary if you live in a metro city or 40% otherwise. Only the smallest of the three is tax-free; the rest is added to your taxable income.
Which cities count as metro cities for HRA?
For HRA purposes, only Delhi, Mumbai, Kolkata and Chennai are considered metro cities — not Bengaluru, Hyderabad or Pune. If you live in one of these four, the 50% limit applies; everywhere else the limit is 40% of salary.
Can I claim both HRA and home loan benefits?
Yes, in certain cases. If you live in a rented house in one city and own a house in another, you can claim HRA exemption and also deduct home loan interest under section 24(b). If you rent out your own property and live elsewhere as a tenant, both benefits can apply too.
Is HRA exemption available under the new tax regime?
No. HRA exemption is only available under the old tax regime. If you opt for the new regime you cannot claim HRA, so the rent you pay gives no direct tax benefit. Compare both regimes in our income tax calculator to see which is better for you.