How to use the hra calculator
- Enter yearly basic plus DA, HRA received, and rent paid.
- Choose metro or non-metro.
- The exempt amount is the lowest of three values, shown below.
About this tool
HRA exemption is the lowest of three values: the HRA you actually receive, rent paid minus 10% of basic plus DA, and 50% (eight metro cities from FY 2026-27) or 40% (other cities) of basic plus DA. The result shows each of the three so you can see which one limits your exemption. HRA exemption is available only under the old tax regime.
The three-way rule
Your HRA exemption is the lowest of these three amounts, calculated on a yearly basis:
- The actual HRA your employer pays you.
- Rent paid minus 10% of your basic salary plus dearness allowance (DA).
- 50% of basic plus DA if you live in a metro city, otherwise 40%.
Whatever is left of your HRA after the exemption is taxable salary.
Two worked examples
Both use basic plus DA of ₹6,00,000 a year and HRA received of ₹2,40,000, in a metro city.
| Rent paid a year | Actual HRA | Rent − 10% of basic | 50% of basic | Exempt HRA |
|---|---|---|---|---|
| ₹3,00,000 | ₹2,40,000 | ₹2,40,000 | ₹3,00,000 | ₹2,40,000 |
| ₹1,80,000 | ₹2,40,000 | ₹1,20,000 | ₹3,00,000 | ₹1,20,000 |
In the first case the whole HRA is exempt. In the second, low rent is the limiting factor, so only ₹1,20,000 is exempt and the remaining ₹1,20,000 is taxed.
Which cities get the 50% limit?
Under the Income-tax Rules, 2026, the 50% limit applies from FY 2026-27 to eight cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Before that, only the first four qualified. Every other city uses 40%. If your tax year spans the change, check which rule your employer applied in your payroll.
What you need to claim it
- You must choose the old tax regime. HRA exemption is not available in the new regime.
- Rent receipts, and the landlord PAN if your yearly rent is more than ₹1 lakh.
- A declaration to your employer, which from FY 2026-27 reportedly also asks you to state your relationship to the landlord. Confirm the current form with your payroll team.
- Actual rent paid. You cannot claim HRA exemption if you do not pay rent.
Paying rent to your parents
You can pay rent to a parent who owns the house, as long as the payment is genuine and made by bank transfer. The parent must show that rent as income in their own tax return. If you do not receive HRA at all, a separate deduction under Section 80GG may help, subject to its conditions.
Frequently asked questions
Which cities count as metro for HRA?
From FY 2026-27, eight cities get the 50% limit: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, and Ahmedabad. Other cities get 40%. Before FY 2026-27 only the first four counted.
Can I claim HRA under the new regime?
No. HRA exemption is available only under the old tax regime.
Do I need rent receipts?
Employers usually ask for receipts and the landlord PAN once yearly rent exceeds ₹1 lakh.
Does basic salary include DA?
For this calculation the base is basic salary plus dearness allowance, but only if DA counts for retirement benefits under your salary terms. Many private-sector salaries have no DA component.
Can I claim HRA and a home loan deduction together?
Yes, in some situations, for example if you live in a rented house in one city and own a home in another. Seek advice for your case.