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HRA Exemption Calculator
House Rent Allowance looks like free money, but only part of it is tax-free. This HRA exemption calculator works out exactly how much of your HRA is exempt under Section 10(13A) and how much will be taxed. It shows all three limits side by side — the HRA you receive, rent minus 10% of salary, and the metro or non-metro cap — so you can see which limit is deciding your exemption, per month and per year.
| Component | Per month | Per year |
|---|---|---|
| HRA received | ||
| Limit 1 — HRA received | ||
| Limit 2 — rent paid minus 10% of salary | ||
| Limit 3 — city cap on salary | ||
| Exempt HRA (least of the three) | ||
| Taxable HRA (received minus exempt) |
How to use this HRA calculator
- Enter your monthly basic salary plus dearness allowance (DA). Only basic + DA count as salary for HRA — not your full CTC and not other allowances.
- Enter the HRA component printed on your salary slip, and the rent you actually pay every month.
- Choose metro if the rented house is in Delhi, Mumbai, Kolkata or Chennai; choose the other option for every other city.
- Read the exemption per month and per year, and check which of the three limits is the smallest — that limit is the one deciding your number.
How HRA exemption works
The exemption is not a flat percentage of your HRA. The Income-tax Act gives you the least of three amounts, which is why two people with the same HRA can get very different exemptions: a person paying low rent in a non-metro city is capped much earlier than a person paying high rent in Mumbai.
Three conditions matter. First, the exemption exists only in the old tax regime; the new regime, now the default, has no HRA exemption at all. Second, you must actually pay rent for the house you live in — living in your own house or rent-free with family gives no exemption, and the full HRA becomes taxable. Third, paperwork: if your yearly rent is above ₹1,00,000, your employer must have your landlord's PAN. Keep the rent agreement and monthly rent receipts — our rent receipt generator below makes the full series in one go.
Worked example
An employee in Delhi has a basic salary + DA of ₹50,000 a month, receives ₹20,000 as HRA and pays ₹18,000 rent:
- Limit 1 — HRA received = ₹20,000
- Limit 2 — rent − 10% of salary = 18,000 − 5,000 = ₹13,000
- Limit 3 — 50% of salary (metro) = ₹25,000
- Exemption = least of the three = ₹13,000 a month, ₹1,56,000 a year
- Taxable HRA = 20,000 − 13,000 = ₹7,000 a month
These are the starting values in the calculator above. Notice that Limit 2 decides here: even in a metro, modest rent pulls the exemption down. Paying ₹25,000 rent instead would lift Limit 2 to ₹20,000 and the full HRA would become exempt.
Four common situations compared
| Situation | Salary (basic + DA) | HRA | Rent | Exemption / month | Deciding limit |
|---|---|---|---|---|---|
| Metro, moderate rent | ₹50,000 | ₹20,000 | ₹18,000 | ₹13,000 | Rent minus 10% of salary |
| Metro, high rent | ₹80,000 | ₹30,000 | ₹50,000 | ₹30,000 | HRA received (fully exempt) |
| Non-metro city | ₹60,000 | ₹30,000 | ₹35,000 | ₹24,000 | 40% of salary cap |
| Metro, low rent | ₹30,000 | ₹12,000 | ₹8,000 | ₹5,000 | Rent minus 10% of salary |
The pattern to remember: your exemption can never exceed the HRA you receive, and cheap rent or a non-metro address caps it well before that. If Limit 2 is your binding line, no salary restructuring will help — only actual rent counts.
Frequently asked questions
What is the HRA exemption formula?
The exemption is the least of three amounts: (1) the HRA you actually receive, (2) the rent you pay minus 10% of your salary, and (3) 50% of your salary if you live in Delhi, Mumbai, Kolkata or Chennai, or 40% of salary in any other city. Here salary means basic salary plus dearness allowance. Whatever HRA is left after the exemption is added to your taxable income.
Is HRA exemption available in the new tax regime?
No. HRA exemption under Section 10(13A) is available only in the old tax regime. The new regime, which is now the default, does not allow this exemption. If a large part of your salary is HRA and you pay high rent, the old regime is often worth comparing before you file — run both calculations and choose the regime that leaves you with less tax.
When is my landlord's PAN required for HRA?
If the rent you pay in a year is more than 1,00,000 rupees (about 8,333 rupees a month), you must report your landlord's PAN to your employer to claim the exemption. Below that limit, signed rent receipts are normally enough. If your landlord does not have a PAN, they can give a written declaration instead, but employers handle this strictly, so arrange it early in the year.
Can I claim HRA if I live in my own house?
No. The exemption exists only when you actually pay rent for the house you live in. If you live in your own house, or live rent-free in a house owned by family, there is no rent payment and no exemption, even if your salary includes an HRA component — the full HRA is then taxable. Paying rent to parents is allowed if the rent is genuinely paid and they show it as their income.
Which cities get the 50% limit for HRA?
Only four metros: Delhi, Mumbai, Kolkata and Chennai. For every other city and town in India the cap is 40% of salary. The city that matters is the one where the rented house is located, not where your employer is based or where your salary is paid from.
Can I claim HRA and home loan benefits together?
Yes, in many real situations. If you own a house in one city but live on rent in another city for work, you can claim HRA for the rented house and also claim home loan interest (and principal under Section 80C) for the owned house, in the old regime. Keep the rent agreement, receipts and loan statements ready, because employers and the tax department can ask for both sets of proof.