HRA Exemption Calculator

Find out exactly how much of your House Rent Allowance is tax-exempt under Section 10(13A) -- and which part of the formula determines your number.

Basic pay plus Dearness Allowance only -- not your full gross salary.

Do you live in a metro city?

Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, and Ahmedabad qualify for the higher 50% rate; other cities get 40%.

Your HRA Exemption

Exempt Amount (Tax-Free)

₹1.56L

Taxable Amount

₹84.00K

Leg 1: Actual HRA Received

₹2.40L

Leg 2: Rent Paid − 10% of Salary

₹1.56L

Leg 3: 50%/40% of Salary

₹3.00L

Your exemption is determined by "Rent Paid − 10% of Salary" (Leg 2) -- the smallest of the three legs.

Estimated Combined Monthly EPF (You + Employer)₹12.00K

Estimated using the standard 12% EPF contribution rate on your Basic + DA, for both you and your employer -- your actual contribution may differ.

This calculator is for illustrative purposes and uses figures verified as of September 2026. HRA exemption is available only under the old tax regime. It is not tax advice -- please verify with your employer's Form 16 or a Chartered Accountant.

Rates and rules last verified on 03 Sep 2026.

How the HRA Exemption Calculator Works

House Rent Allowance is only partly tax-free -- the exempt portion is the LEAST of three amounts: the actual HRA your employer pays you, the rent you pay minus 10% of your salary (Basic + DA), or 50% of your salary if you live in a metro city (40% elsewhere). Whichever of these three numbers is smallest is what you get to exclude from taxable income; the rest of your HRA is taxed as ordinary salary.

'Salary' in this formula means Basic pay plus Dearness Allowance only -- not your gross salary and not other allowances or perquisites, which is one of the most common points of confusion when people estimate this themselves. HRA exemption is also available only under the old tax regime; the new regime doesn't offer it at all, which is one of the biggest reasons someone who pays significant rent often does better staying on the old regime.

Exemption = MINIMUM of: (1) Actual HRA received, (2) Rent paid − 10% of Salary, (3) 50% of Salary (metro) or 40% of Salary (non-metro), where Salary = Basic + DA

Frequently asked questions

I live in a non-metro city that feels expensive -- do I still only get 40%?

Yes -- the 50%/40% split is based on a fixed list of eight metro cities (Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad) for this purpose, not on actual cost of living. Every other city, regardless of local rent levels, uses the 40% limb.

Can I claim HRA exemption if I pay rent to my parents?

Generally yes, provided the arrangement is genuine -- you actually pay rent, ideally via bank transfer with a rental agreement, and your parent(s) declare that rent as their own taxable income. Paying rent to a spouse is treated much more strictly by tax authorities and is generally not accepted.

What if my rent is higher than my HRA?

You can still only exempt up to whichever of the three amounts is smallest -- if your actual HRA received is the smallest of the three, that caps your exemption even if your real rent and 50%/40% of salary are both larger.