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HRA Exemption Calculator

Calculate your House Rent Allowance exemption using the three-way rule, with the latest metro city list, and see how much of your HRA is taxable.

Rules last reviewed: September 2026

Disclaimer: Results are estimates for informational purposes only and are not professional financial, tax or legal advice. Rules change — please verify with official sources or a qualified professional before making decisions.

What is HRA exemption?

House Rent Allowance (HRA) is part of your salary meant to cover rent. If you pay rent, a portion of HRA is exempt from income tax. The rest is added to your taxable income. The exemption is available only under the Old tax regime.

How the exemption is calculated

Your exempt HRA is the lowest of three amounts:

  1. The actual HRA you receive.
  2. Rent paid minus 10% of Basic + DA.
  3. 50% of Basic + DA if you live in a metro city, otherwise 40%.

Worked example

Metro city, monthly figures

Basic + DA / HRA received / rent
₹50,000 / ₹20,000 / ₹18,000
1. Actual HRA
₹20,000
2. Rent − 10% of basic
₹13,000
3. 50% of basic
₹25,000
Exempt HRA (lowest)
₹13,000
Taxable HRA
₹7,000

Which cities count as metro?

For FY 2026-27, the 50% limit applies to 8 cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad. For FY 2025-26, only Delhi, Mumbai, Kolkata, Chennai qualified; every other city uses 40%.

Keep rent receipts and agreements. If annual rent is above ₹1,00,000, your employer needs the landlord's PAN.

Common HRA mistakes

  • Claiming HRA under the New regime, where it is not allowed.
  • Including special or conveyance allowances in Basic — only Basic, DA (if part of retirement benefits) and eligible commission count.
  • Not keeping rent receipts or agreements for the months claimed.
  • Claiming rent paid to your spouse, or rent for a house you own and live in.

Frequently asked questions

Can I claim HRA under the New tax regime?

No. HRA exemption is available only under the Old regime. Compare both regimes in the income tax calculator before choosing.

Can I claim HRA if I live with my parents?

Yes, if you actually pay rent to them, have a rent agreement or receipts, and they declare the rent as income. Payments to a spouse are not eligible.

What if I do not get HRA from my employer?

You can claim a deduction for rent paid under Section 80GG instead, subject to conditions and limits. It is usually lower than the HRA exemption.

Is Basic + DA the same as basic salary?

For HRA, Basic includes Dearness Allowance if it forms part of retirement benefits, plus commission based on a fixed percentage of turnover. Other allowances are excluded.

Do I lose HRA benefit if I change cities mid-year?

No. Calculate the exemption separately for each period using the metro or non-metro status of the city where you lived and paid rent, then add the two amounts.