HRA exemption calculator
The exemption is the least of three numbers. This works out all three.
Old regime only — HRA exemption is not available in the new regime.
Figures are indicative. Thresholds, surcharge and current-year notifications are not fully modelled — confirm edge cases with your CA.
What this calculates
House rent allowance is exempt only to the extent of the least of three amounts, and the answer is almost never the whole allowance. The exemption is available under the old regime; the new regime does not allow it, which makes this one of the calculations that decides which regime a salaried person should be on.
How it is worked out
- 1The first amount is the HRA your employer actually paid you for the year.
- 2The second is rent actually paid, minus 10% of salary for the same period.
- 3The third is 50% of salary if you live in Delhi, Mumbai, Kolkata or Chennai, and 40% everywhere else.
- 4Salary here means basic pay plus dearness allowance forming part of retirement benefits, plus any commission on turnover.
- 5The exemption is the lowest of the three. The balance of the allowance is taxable salary.
Worked example
Basic ₹50,000 a month in Mumbai, HRA ₹20,000 a month, rent paid ₹25,000 a month.
- HRA received
- ₹2,40,000
- Rent paid less 10% of salary
- ₹2,40,000
- 50% of salary (metro)
- ₹3,00,000
- Exemption — the least
- ₹2,40,000
Common questions
How is HRA exemption calculated?
It is the least of three amounts: the HRA actually received, the rent paid minus 10% of salary, and 50% of salary for the four metro cities or 40% elsewhere. Whatever the least of those is, that much of the allowance is exempt and the rest is taxable.
Can I claim HRA exemption under the new tax regime?
No. The HRA exemption under section 10(13A) is available only under the old regime. For someone paying substantial rent, that exemption alone can be what makes the old regime cheaper.
Which cities count as metro for HRA?
Delhi, Mumbai, Kolkata and Chennai. Those four allow 50% of salary in the third limb of the calculation; every other city, including Bengaluru and Hyderabad, allows 40%.
Do I need the landlord's PAN to claim HRA?
Where annual rent exceeds ₹1,00,000, the landlord's PAN has to be reported to the employer. Without it the employer cannot allow the exemption in the salary computation, though the claim can still be made when filing the return.
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