HRA Exemption Calculator

⚡ In shortWork out exactly how much of your House Rent Allowance is tax-exempt under Section 10(13A) — free, instant, and accurate for salaried employees in India.

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How it is calculated

Your exempt HRA is the least of these three: (1) the actual HRA you received; (2) the rent you paid minus 10% of your salary (Basic + DA); and (3) 50% of your salary for a metro city or 40% for a non-metro city. From FY 2026-27, the Income Tax Rules 2026 expand the 50% list from four to eight cities — Delhi, Mumbai, Kolkata and Chennai plus Bengaluru, Hyderabad, Pune and Ahmedabad; for FY 2025-26 the four newly added cities are still 40%. Whatever is left over is added to your taxable salary. HRA exemption is available only under the old tax regime.

Three tests, and the lowest one wins

The exemption under section 10(13A) is the least of the actual HRA received; the rent you paid minus 10% of salary; and 50% of salary if you live in Delhi, Mumbai, Kolkata or Chennai, or 40% anywhere else. All three are computed on salary meaning basic plus dearness allowance — not CTC and not gross. Using gross salary is the most common reason a self-computed exemption comes out far too high.

Only four cities count as metro here

For HRA purposes the 50% rate applies to Delhi, Mumbai, Kolkata and Chennai alone. Bengaluru, Hyderabad, Pune, Ahmedabad and every other city take 40%, however large or expensive they are. This is a frequent source of over-claim, and because the difference is a full ten percentage points of salary, it is rarely a small error when it is picked up.

The landlord's PAN above ₹1 lakh

Where the rent claimed exceeds ₹1 lakh in a financial year, the landlord's PAN must be reported to your employer. Without it the exemption is generally denied at the payroll stage, and claiming it later at filing invites scrutiny. Ask for the PAN when the agreement is signed rather than during the January proof-collection rush — reluctance in March usually signals a problem.

Rent to parents is allowed if it is genuine

The property must actually belong to the parent, the rent must actually be paid — ideally by bank transfer — and the parent must show that rent as income in their own return. Where the parent's income is low the family position can genuinely improve. What fails is a paper arrangement with no money moving; that is the first thing tested, and receipts written up afterwards do not survive it.

Two situations people get wrong

First, if you own a house in the same city and live in it, no HRA exemption arises — but if you rent in one city while owning a house elsewhere, HRA and home-loan interest can both be claimed. Second, HRA does not exist in the new regime at all, so the exemption is only available if you have positively elected the old one. Compare the two properly with the regime calculator that includes HRA.

Frequently asked questions

Is HRA exemption available under the new tax regime?

No. The HRA exemption under Section 10(13A) is available only if you opt for the old tax regime. The new regime does not allow it.

Do I need my landlord's PAN to claim HRA?

Yes — if your total annual rent exceeds Rs 1,00,000, you must report your landlord's PAN to your employer to claim the HRA exemption. From 1 April 2026, Form 124 replaces Form 12BB and adds a mandatory disclosure of your relationship with the landlord.

Which cities get the 50% HRA exemption?

Until FY 2025-26, only Delhi, Mumbai, Kolkata and Chennai qualified for 50%. From FY 2026-27, the Income Tax Rules 2026 add four more — Bengaluru, Hyderabad, Pune and Ahmedabad — making eight cities at 50%. Every other city is 40%.

Did HRA rules change in 2026?

Yes. From FY 2026-27, Bengaluru, Hyderabad, Pune and Ahmedabad move from the 40% bracket to the 50% metro bracket for HRA, and Form 124 (replacing Form 12BB) requires you to disclose your relationship with the landlord.