ReckonBoxHow the HRA exemption calculator works
HRA exemption is the slice of your house rent allowance that escapes income tax under Section 10(13A), and it is the least of three amounts, not the whole HRA your employer pays. This calculator takes your basic pay, any DA, the HRA you receive, the rent you pay and your city, works out all three legs, and shows which one decides your exemption. Enter monthly or annual figures; the result is always the annual exemption you claim on your return.
Run the default. On a ₹30,000 monthly basic in Mumbai with ₹18,000 HRA and ₹20,000 rent, the annual salary is ₹3,60,000, and the three legs come to ₹2,16,000, ₹2,04,000 and ₹1,80,000. The smallest, ₹1,80,000, is your exemption, so ₹36,000 of the HRA stays taxable. The lowest leg wins, which is why a large HRA on paper doesn't always mean a large exemption.
The three legs, and which one binds
The exemption equals the least of the actual HRA received, the rent paid minus 10% of salary, and 50% of salary for a metro city or 40% for a non-metro one. Most calculators show only an exempt and a taxable number and hide the arithmetic, so you can't see why. Here every leg is on the table, with the binding one marked.
| Leg | How it is worked out | Amount (default) |
|---|---|---|
| Actual HRA received | The HRA your employer pays | ₹2,16,000 |
| Rent minus 10% of salary | ₹2,40,000 rent minus ₹36,000 | ₹2,04,000 |
| 50% of salary (metro) | 50% of ₹3,60,000 | ₹1,80,000 |
On these numbers the third leg is smallest, so it sets the exemption at ₹1,80,000. Change the city to non-metro and the third leg drops to 40% of salary, ₹1,44,000, which would then bind and lower the exemption further.
What counts as salary here
Salary for HRA is basic pay plus dearness allowance plus any commission fixed as a percentage of turnover, not your gross CTC. This matters because two of the three legs are built on it: the 10% subtracted from rent, and the 50% or 40% cap. A common mistake is to use total salary or CTC, which inflates those legs and overstates the exemption, so the calculator shows the exact salary figure it used.
DA only counts when it forms part of your retirement benefits, which is the usual case for government and many PSU roles and often nil in the private sector. Enter your DA if you have it, and leave it at zero if you don't.
Metro or non-metro, and the year that changes it
For FY 2025-26 the metro cities that allow 50% of salary are Delhi, Mumbai, Kolkata and Chennai, and every other city is non-metro at 40%. That's the surprising part for many renters: Bengaluru, Hyderabad and Pune are non-metro for HRA this year, at 40%, even though they are among the country's largest cities.
This changes from FY 2026-27, when the metro list expands to add Bengaluru, Hyderabad, Pune and Ahmedabad at 50%. The calculator has a financial-year selector so it applies the right list, because using the eight-city list a year early would overstate the exemption for those cities. Pick the year you're filing for and the city badge updates to match.
Only in the old regime
HRA exemption under Section 10(13A) exists only in the old tax regime; the new regime does not exempt it. If you file under the new regime, the entire HRA is taxable and this exemption is worth nothing to you. So the number here helps only when the old regime is your choice, and you can test that choice in the income tax calculator, then feed this exemption into the take-home salary calculator as an old-regime deduction.
The landlord PAN rule
You must report your landlord PAN to claim HRA once the annual rent crosses ₹1,00,000, which is about ₹8,334 a month. The default rent of ₹2,40,000 is well past that line, so the calculator flags that a PAN is needed. If your landlord has no PAN, a signed self-declaration from them is accepted under CBDT circular 8/2013, so the requirement is either the PAN or that declaration once rent passes the threshold. Rent receipts and a rent agreement are worth keeping either way.
What this does not cover
This calculator works out the Section 10(13A) exemption from a single set of figures. When your rent or salary changes during the year, the exemption is legally worked out period by period and totalled, so compute each stretch separately and add them up. It does not check whether your rent is genuine or whether you actually live in rented accommodation, both of which the exemption requires, and it does not compute your total tax. Rules can change with each Budget, so treat the figure as a close estimate and, for a return that matters, have a chartered accountant confirm it.
Frequently asked questions
What is HRA exemption? HRA exemption is the part of your house rent allowance that is free of income tax under Section 10(13A), given to salaried people who pay rent. It is the least of three amounts: the actual HRA received, the rent paid minus 10% of salary, and 50% of salary in a metro city or 40% elsewhere.
How is HRA exemption calculated? The exemption equals the lowest of three figures. On a ₹3,24,000 basic salary in Delhi with ₹1,62,000 HRA received and ₹2,16,000 rent paid, the three legs are ₹1,62,000 (actual HRA), ₹1,83,600 (rent minus 10% of salary) and ₹1,62,000 (50% of salary), so the exemption is ₹1,62,000 and none of the HRA is taxed.
What counts as salary for HRA? Salary for HRA means basic pay plus dearness allowance plus any commission fixed as a percentage of turnover, not your gross CTC. The 10% and the 50% or 40% figures are both worked on this salary, which is why the calculator shows the salary it used.
Which cities are metro for HRA? For FY 2025-26 the metro cities that allow 50% of salary are Delhi, Mumbai, Kolkata and Chennai, and every other city is non-metro at 40%. From FY 2026-27 the list expands to add Bengaluru, Hyderabad, Pune and Ahmedabad, so for the current year those four are still non-metro despite being large cities.
Can I claim HRA exemption in the new tax regime? No, HRA exemption under Section 10(13A) is available only in the old tax regime. If you file under the new regime, the whole HRA is taxable, so this exemption is worth claiming only when the old regime is your choice.
Do I need my landlord PAN to claim HRA? You need to report your landlord PAN if the annual rent exceeds ₹1,00,000, which is about ₹8,334 a month. If the landlord has no PAN, a self-declaration from them is accepted per CBDT circular 8/2013, so the requirement is the PAN or a declaration once rent crosses that line.
Can I claim HRA and a home loan together? Yes, you can claim HRA exemption and home loan benefits at the same time if you genuinely pay rent where you live and own a home elsewhere, or your own home is let out or not reasonably accessible from work. Both are allowed when the facts support them, so the exemption here and the home loan interest are separate claims.
What if my rent or salary changed during the year? When the rent or the salary changes mid-year, the exemption is worked out period by period and added up, because each leg depends on the salary and rent for those months. This calculator uses a single set of figures, so for a mid-year change compute each period separately and total the exemptions.