HRA Calculator
Enter amounts
Enter your basic salary, HRA and rent
and tap Calculate HRA Exemption.
HRA Calculator – How Much of Your HRA Is Tax-Free?
If you live in a rented home and your salary includes a House Rent Allowance (HRA), part or all of that allowance can be tax-free under the old tax regime. This HRA calculator applies the official three-limit rule and the latest change for FY 2026-27: the 50% limit, which used to apply only to Delhi, Mumbai, Kolkata and Chennai, now also covers Bengaluru, Hyderabad, Pune and Ahmedabad. For lakhs of salaried renters in these cities, that means a bigger exemption and less tax.
HRA exemption formula
The tax-free HRA is the lowest of these three amounts, worked out for the period you lived in a rented house:
- Actual HRA received from your employer.
- Rent paid minus 10% of salary.
- 50% of salary if you live in one of the eight metro cities, or 40% of salary anywhere else.
Here "salary" means Basic pay + Dearness Allowance (only the DA that counts for retirement benefits) + any commission paid as a fixed percentage of turnover. It does not include HRA itself, bonus or other allowances. Whatever HRA is left after the exemption is added to your taxable income.
Which cities get 50% HRA exemption in 2026-27?
| City | FY 2025-26 | FY 2026-27 onwards |
|---|---|---|
| Delhi, Mumbai, Kolkata, Chennai | 50% | 50% |
| Bengaluru, Hyderabad, Pune, Ahmedabad | 40% | 50% |
| All other cities (Noida, Gurugram, Jaipur, Lucknow, etc.) | 40% | 40% |
The wider list comes from the Income-tax Rules, 2026, which apply from 1 April 2026. That means the new 50% limit is used for salary earned in FY 2026-27, which you will report in the return filed in 2027. For the FY 2025-26 return the old four-city list still applies, so choose the right year in the calculator.
Example: ₹40,000 basic in Bengaluru
Riya earns a basic salary of ₹40,000 a month with ₹20,000 HRA and pays ₹25,000 rent in Bengaluru. Per month:
| Limit | FY 2025-26 (40%) | FY 2026-27 (50%) |
|---|---|---|
| Actual HRA | ₹20,000 | ₹20,000 |
| Rent − 10% of salary (25,000 − 4,000) | ₹21,000 | ₹21,000 |
| 40% / 50% of salary | ₹16,000 | ₹20,000 |
| Exempt HRA (lowest) | ₹16,000 | ₹20,000 |
Riya's exempt HRA rises by ₹4,000 a month, or ₹48,000 a year. In the 30% slab with 4% cess, that saves her about ₹14,976 in tax every year – just because Bengaluru is now treated as a metro for HRA.
HRA in the New Tax Regime
The HRA exemption is not available under the new tax regime, which is now the default. If you choose the new regime, the whole HRA is taxable, but you get lower slab rates and a higher standard deduction. Whether the old regime with HRA saves more depends on your rent and other deductions such as 80C, 80D and home loan interest. Compare both regimes with our income tax calculator after you know your HRA exemption from this tool.
How to Use the HRA Calculator
- Choose whether you will enter monthly or yearly amounts.
- Enter your basic salary and any DA that counts for retirement benefits.
- Enter the HRA shown on your payslip and the rent you actually pay.
- Select your city and the financial year.
- Pick your tax slab to see how much tax the exemption saves.
- Tap Calculate HRA Exemption. The chart shows all three limits and highlights the lowest one, which is your exemption.
Tips to Claim the Maximum HRA Exemption
- Pay rent by bank transfer and keep rent receipts with the landlord's name, address and signature.
- If yearly rent is more than ₹1 lakh, give your employer the landlord's PAN.
- Paying rent to parents is allowed if they own the house and declare the rent as income. Rent to your spouse is generally not accepted.
- If you moved city during the year, work out HRA separately for each period with that city's limit.
- If your employer did not count your HRA, you can still claim the exemption when you file your return.
- If you do not get HRA at all, you may be able to claim a deduction for rent under the old regime's section 80GG.
Why the Rent − 10% Rule Matters
The second limit is the one that most often decides your exemption. If your rent is low compared with your salary, "rent minus 10% of salary" becomes small. For example, with ₹80,000 basic and ₹12,000 rent, rent minus 10% is only ₹4,000 a month, so only ₹4,000 of HRA is tax-free even if you receive ₹40,000. Paying rent of less than 10% of salary gives no exemption at all. This is why the calculator shows all three numbers side by side.
Planning to buy instead of rent? Check the EMI on a home loan with our EMI calculator and compare it with the rent and HRA benefit you would lose.
Frequently Asked Questions
How is HRA exemption calculated?
The exempt HRA is the lowest of three amounts: the actual HRA received, rent paid minus 10% of salary, and 50% of salary for the eight metro cities or 40% for other cities. Salary means basic pay plus DA that counts for retirement benefits.
Which cities are metro cities for HRA in 2026-27?
From FY 2026-27, eight cities get the 50% limit: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. All other cities use 40%.
Is Bengaluru a metro city for HRA?
Yes, from FY 2026-27 under the Income-tax Rules, 2026. For FY 2025-26 and earlier years Bengaluru was a non-metro for HRA and the 40% limit applied.
Can I claim HRA in the new tax regime?
No. HRA exemption is available only under the old tax regime. Under the new regime the full HRA is taxable.
Is landlord PAN required for HRA?
Yes, if the rent you pay is more than ₹1 lakh in a year, you must give your employer your landlord's PAN to claim the exemption.
Can I claim HRA if I pay rent to my parents?
Yes, if your parents own the house, you actually pay the rent, and they show it as income in their tax return. Keep bank transfer records and a rent agreement.
What happens if I do not pay rent?
If you live in your own house or do not pay rent, no HRA is exempt and the full allowance is taxable.
Does DA count in salary for HRA?
Only the part of Dearness Allowance that counts for retirement benefits is included. Most government DA counts. Check your offer letter or ask HR for private-sector DA.
Sources: Income-tax Act – exemption for House Rent Allowance (formerly section 10(13A) and rule 2A); Income-tax Rules, 2026 extending the 50% limit to Bengaluru, Hyderabad, Pune and Ahmedabad from 1 April 2026 (FY 2026-27). Checked October 2026. Confirm with your employer or a tax adviser for your own return.