Salary & Rent Input
Amount labelled 'House Rent Allowance' on your salary slip.
Total rent paid to your landlord or property owner.
3-Rule Statutory Comparison📋
How HRA exemption is actually calculated
House Rent Allowance exemption, under Section 10(13A), is the least of three separate amounts — not a simple percentage of your salary, and not the full rent you pay. Most people assume it's one or the other; it's actually whichever of the three numbers turns out smallest, and which one that is changes depending on your specific salary and rent.
Actual HRA Received
The HRA your employer actually pays you. You can never be exempted for more than you received — however high your rent is.
Rent Paid − 10% of Basic
A small share of your salary is assumed to go toward housing. Only rent above that 10% baseline counts toward exemption.
% of Basic Salary
50% of basic for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for all other cities. The city ceiling applies regardless of actual rent.
The metro list is shorter than most people think
Only four cities count as metros: Delhi, Mumbai, Kolkata, and Chennai. Bengaluru, Hyderabad, Pune, Gurgaon, and Noida are all non-metros under this rule — even if your rent is higher than in those four cities.
Why this only matters under the old regime
HRA exemption is one of the deductions the new tax regime removed entirely. If you've chosen the new regime — the default since FY 2023-24 — this calculation doesn't apply to you at all.
A quick example
Someone earning ₹50,000/month in basic, receiving ₹25,000 HRA, and paying ₹20,000 rent in Chennai compares: Rule 1 = ₹3,00,000 (HRA received); Rule 2 = ₹2,40,000 − ₹60,000 = ₹1,80,000; Rule 3 = ₹3,00,000 (50% of basic). The lowest — ₹1,80,000 — is the binding constraint. This surprises people who expect their full HRA to be exempt.
Frequently asked questions
Is Bengaluru a metro city for HRA purposes?
No. Only Delhi, Mumbai, Kolkata, and Chennai count as metros for Section 10(13A). Bengaluru, Hyderabad, Pune, Gurgaon, and Noida all use the lower 40% of basic salary limit, however expensive rent is in those cities. This is the single most common mistake people make when estimating their own HRA exemption.
Can I claim HRA exemption under the new tax regime?
No. HRA exemption under Section 10(13A) is only available under the old tax regime. If you've chosen the new regime, this exemption doesn't apply to you at all, regardless of how much rent you pay.
What if my actual HRA received is very low, but I pay high rent?
Your exemption is capped at the lowest of the three amounts — including actual HRA received. If your employer pays you very little HRA, that becomes the binding constraint no matter how much rent you actually pay, since you can't be exempted for more than you received.
Do I need rent receipts to claim this exemption?
Yes. Most employers require rent receipts (and a copy of the rental agreement, particularly if annual rent exceeds ₹1,00,000) to factor HRA exemption into your monthly TDS. Keep these on hand regardless — they're standard documentation your employer or the tax department can ask for.
What if I live with my parents and pay them rent?
This is allowed, provided the arrangement is genuine — a rental agreement, actual rent payments (ideally through a bank transfer, not cash), and your parents declaring that rent as income on their own return. It's a legitimate structure many people use, but it needs to hold up as real, not just paperwork.
Does this calculator use my exact numbers or a formula?
The exact formula from Section 10(13A): the lowest of your actual HRA received, your rent paid minus 10% of your basic salary, and 50% of basic (metro) or 40% (non-metro). Nothing is approximated — enter your real basic, HRA, rent, and city, and the number above is your real exemption.
What counts as 'basic salary' for this calculation?
Basic salary plus dearness allowance (DA), if your employer pays DA — most private-sector employers don't, so for most people this is simply their basic pay. It doesn't include HRA itself, bonuses, or other allowances.
This is an estimate for informational purposes, not tax advice. Verify with a chartered accountant or at incometaxindia.gov.in before making financial decisions.
Last verified: August 2026 · FY 2026-27 rates