HRA Exemption Calculator
Work out how much of your house rent allowance is tax free, and which limit is capping it.
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HRA exemption is available under the old regime only. The new regime, which is the default, disallows it.
Basic pay plus dearness allowance — not your full CTC.
Metro means only Delhi, Mumbai, Kolkata, Chennai. Bengaluru, Hyderabad and Pune do not count.
Tax-free HRA
₹0
- Exempt from tax
- ₹0
- Still taxable
- ₹0
Results update as you type.
The three limits
Your exemption is whichever of these is smallest.
| Limit | Amount | Binding? |
|---|
How the exemption is worked out
Section 10(13A), read with Rule 2A, exempts the least of three amounts. Not the largest, and not a percentage of what you pay — the smallest of the three.
1. HRA actually received
2. Rent paid − 10% of salary
3. 50% of salary (metro) or 40% (elsewhere)
exemption = min(1, 2, 3)
"Salary" here means basic pay plus dearness allowance forming part of retirement benefits. It is not your CTC or your gross pay, and using the larger figure is a common way to overstate the answer.
Why knowing which limit binds matters
The three limits respond to completely different things, so the one that binds tells you whether anything can be done:
- The allowance binds — you are already exempting every rupee of HRA you receive. Paying more rent changes nothing; only a salary restructure would help.
- Rent binds — you have headroom. Rent genuinely higher than what you pay now would increase the exemption, up to the percentage cap.
- The percentage binds — you have hit the statutory ceiling. Neither more rent nor more HRA will help.
Only four cities are metro
Delhi, Mumbai, Kolkata and Chennai. That list is fixed in the rule and has not followed the country's growth, so Bengaluru, Hyderabad, Pune, Ahmedabad and Gurugram are all non-metro for HRA no matter how high rents there have become. Assuming otherwise overstates the cap by ten percentage points of salary.
The zero-exemption surprise
If your rent is at or below 10 per cent of salary, the second limit is zero — so the least of the three is zero and none of your HRA is exempt. Someone earning well and paying modest rent can receive HRA every month and be entitled to nothing. That is the rule working as written rather than an error.
Remember too that all of this applies under the old regime only. To see whether the old regime is worth choosing once HRA is counted, use theincome tax calculator.
Frequently asked questions
How is HRA exemption calculated?
It is the least of three amounts: the HRA you actually received, the rent you paid minus 10 per cent of your salary, and 50 per cent of salary if you live in Delhi, Mumbai, Kolkata or Chennai or 40 per cent anywhere else. Salary here means basic pay plus dearness allowance forming part of retirement benefits, not your whole package. Whichever of the three is smallest is your exemption.
Is Bengaluru a metro for HRA?
No. Only Delhi, Mumbai, Kolkata and Chennai count as metro cities under Rule 2A. Bengaluru, Hyderabad, Pune, Ahmedabad and Gurugram are all non-metro for this purpose regardless of how expensive they are, so the cap is 40 per cent of salary rather than 50. This is the single most common mistake people make with HRA.
I pay rent but the calculator shows zero exemption. Why?
Almost certainly because your rent is at or below 10 per cent of your salary. The second limit is rent minus 10 per cent of salary, so if rent does not exceed that threshold the limit is zero, and the least of the three is therefore zero. It is in the rule rather than an error, and it catches out people with a good salary and modest rent.
Can I claim HRA under the new tax regime?
No. The new regime disallows the HRA exemption along with most other allowances, which is part of the trade for its wider slabs and larger standard deduction. If you have substantial HRA and pay significant rent, that is one of the stronger arguments for staying on the old regime — compare the two on the income tax calculator.
Can I claim HRA and a home loan deduction at the same time?
Yes, in the right circumstances, and it is not as unusual as it sounds. If you own a property in one city and genuinely rent in another for work, you can claim HRA on the rent and interest deduction on the loan. Claiming both for the same city invites scrutiny and needs to be genuinely justifiable.
What proof do I need?
Rent receipts, and a rent agreement is advisable. Where annual rent exceeds one lakh, your employer will require the landlord’s PAN. Paying rent to a parent is permitted provided the arrangement is genuine, the property is actually theirs, and they declare the rent as income.
Is what I enter sent anywhere?
No. The calculation runs entirely in your browser. Nothing is transmitted, stored or logged.
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