HRA Tax Exemption Calculator

Find out exactly how much of your HRA is tax-free and how much is taxable — instantly. Updated for New IT Rules 2026: 8 metro cities now at 50% exemption. Includes Section 80GG for non-HRA employees.

50%8 Metro Cities
40%Non-Metro Cities
Sec 10(13A)HRA Exemption
Sec 80GGNo HRA? Claim This

HRA Tax Exemption Calculator

Enter your salary details for a complete monthly and annual HRA tax breakdown

Tax Regime
🧾 Old Regime — HRA Exemption Available
⚡ New Regime — HRA Fully Taxable
Section 10(13A) HRA exemption applies only in the Old Tax Regime
Monthly Basic Pay (₹)

Basic salary only — exclude DA, HRA, and other allowances
Monthly Dearness Allowance – DA (₹)

Enter 0 if no DA component in your salary
Monthly HRA Received (₹)

Actual HRA paid by employer each month
Monthly Rent Paid (₹)

Actual rent you pay to your landlord per month
City Type
Metro City — 50% exemption (Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Pune, Hyderabad, Ahmedabad)Non-Metro / Other City — 40% exemption
From April 1, 2026 — 8 cities now qualify for 50% rate
Your Tax Slab (for tax saving estimate)
Nil (≤₹3L)
5% (₹3–7L)
20% (₹7–10L)
30% (₹10L+)
10% Surcharge
15% Surcharge

📐 Three Amount Comparison (Annual) — Exempt = Lowest
Amount 1
₹0
Actual HRA Received
Amount 2
₹0
50%/40% of Salary
Amount 3
₹0
Rent – 10% Salary

⚠️ New Tax Regime Selected: HRA exemption under Section 10(13A) is NOT available in the New Tax Regime. Your entire HRA is fully taxable as part of your salary. Switch to the Old Regime to claim HRA exemption. For employees without HRA, Section 80GG is also not available under the New Regime.

📋 No HRA from Employer? Calculate Section 80GG Deduction Instead

Annual Total Income (₹)

Gross total income before 80GG deduction
Annual Rent Paid (₹)

Total rent paid in the financial year
⚡ Calculate 80GG Deduction
✅ Section 80GG Deduction—
⚡ Calculate HRA Tax Exemption

📊 HRA Tax Exemption Breakdown

Tax-Free HRA: —
Taxable HRA: —
Monthly Basic + DA—
Monthly HRA Received—
Monthly Rent Paid—
City Classification—
Amount 1 — Actual HRA (Annual)—
Amount 2 — 50%/40% of Salary (Annual)—
Amount 3 — Rent minus 10% Salary (Annual)—
Lowest of 3 (Exempt Amount)—
✅ Annual Tax-Free HRA—
⚠️ Annual Taxable HRA—
💰 Estimated Annual Tax Saved—

Monthly Figures

HRA Exemption Rules — Complete Guide 2026

Section 10(13A), Section 80GG, and New IT Rules — incometax.gov.in

🧮The HRA Exemption Formula — Section 10(13A)

Tax-exempt HRA = the lowest of these three amounts (computed annually):

Amount 1

Actual HRA Received

HRA (monthly) × 12Total HRA paid by employer in the year

The full annual HRA as shown in your salary slip or Form 16 Part-B.

Amount 2

% of Basic + DA

50% (Metro) or 40% (Non-Metro)
× Annual (Basic + DA)8 cities at 50% from April 2026

Metro from April 2026: Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Pune, Hyderabad, Ahmedabad.

Amount 3

Rent Paid – 10% of Salary

Annual Rent Paid
− 10% × (Basic + DA)Zero if rent < 10% of salary

If you pay less than 10% of your Basic+DA as rent, Amount 3 becomes zero and full HRA is taxable.

📊Worked Examples — FY 2025-26 (AY 2026-27)

Key Insight: Amount 3 (Rent – 10% Salary) is the most commonly limiting factor for mid-to-senior salary employees. Paying higher rent increases Amount 3 and thus increases your exemption — up to the cap of Amount 1 (actual HRA received).

📋Section 80GG — For Employees Without HRA Old Regime Only

If your employer does not provide HRA (common in small firms, startups, or self-employed individuals), you can claim rent deduction under Section 80GG — the least of these three:

Limit A

₹5,000 / Month

Fixed ceiling of ₹60,000 per year (₹5,000 × 12). This cap was revised from ₹2,000/month to ₹5,000/month in Budget 2016 and remains unchanged in 2026.

Limit B

25% of Adjusted Income

25% of your Adjusted Total Income (gross total income minus long-term capital gains, short-term gains, and other deductions before 80GG).

Limit C

Rent Paid – 10% of Income

Actual annual rent paid minus 10% of Adjusted Total Income. Negative result = zero. File Form 10BA to claim this deduction.

80GG Conditions: You must NOT own a house at the place of work (or spouse/minor child), must NOT receive HRA from employer, must be paying rent for residential accommodation, and must file Form 10BA online before ITR submission. Not available under New Tax Regime.

💡How to Maximise Your HRA Exemption

1

Pay Higher Rent: Amount 3 = Rent − 10% of Salary. Paying more rent directly increases your exemption, up to the limit of your actual HRA. Even small rent increases can translate to significant tax savings.

2

Restructure Salary: Negotiate a higher HRA component and lower special allowances. HRA gets a tax exemption — special allowances are fully taxable. Even shifting ₹5,000/month to HRA can save ₹18,000–₹30,000/year in taxes.

3

Keep Rent Receipts: Maintain rent receipts for all 12 months, a signed rent agreement, and bank statements showing rent transfers. For rent above ₹8,333/month, obtain your landlord’s PAN and submit it via Form 124 (replaced Form 12BB from April 2026).

4

Old vs New Regime Check: Run a comparison — HRA exemption is only in the Old Regime. If your annual exemption exceeds ₹1–2 lakhs, the Old Regime often wins despite lower slab rates in the New Regime. Use a tax comparison calculator.

5

Metro City Benefit (2026): If you are in Bengaluru, Pune, Hyderabad, or Ahmedabad, your exemption rate jumped from 40% to 50% from April 1, 2026. Recompute your tax — you may have significant additional savings this FY.

🔄Old Regime vs New Regime — Which Saves More Tax?

💡 Rule of Thumb: If your annual HRA exemption exceeds ₹1,50,000 — the Old Regime almost always saves more tax. If you are in a non-metro city, paying low rent, or staying in your own house, the New Regime’s lower slab rates may be more beneficial.

📘 How to Use the HRA Tax Exemption Calculator

Start with the tax-regime toggle. The source calculator makes Section 10(13A) available only under the Old Regime path, while the New Regime path hides the exemption form and shows a warning that HRA is treated as fully taxable in the page logic.

Enter monthly Basic Pay, applicable DA, HRA received and actual rent paid. Then choose Metro or Non-Metro and select the tax-slab chip used only for the estimated tax-saving figure. The three-amount preview updates live as you type.

After clicking Calculate, review the annual values for Amount 1, Amount 2 and Amount 3. The lowest value becomes the annual tax-free HRA, while the balance of HRA received is shown as taxable.

For a simpler standalone workflow, use the HRA Exemption Calculator. If your first task is verifying salary structure rather than tax treatment, use the Gross vs Net Salary Calculator.

📐 Understanding Amount 1, Amount 2 and Amount 3

Amount 1 is the annual HRA actually received from the employer. This creates an upper ceiling because the exemption cannot exceed the HRA paid during the year.

Amount 2 applies the city percentage to annual Basic + DA. The source page uses one percentage for Metro and another for Non-Metro, so city selection can materially change this ceiling.

Amount 3 subtracts 10% of annual Basic + DA from annual rent paid. If rent is low relative to salary, Amount 3 often becomes the smallest value and limits the exemption.

The calculator highlights the lowest of the three cards in green. This is the key value to understand before looking at the tax-saving estimate.

🏙️ Metro vs Non-Metro Selection

The city selector changes only Amount 2 in the three-part formula. Amount 1 still comes from HRA received and Amount 3 still comes from rent paid minus 10% of salary.

This means a Metro classification does not automatically increase the final exemption if Amount 3 remains the lowest. A higher city ceiling matters only when it becomes the limiting factor or allows another amount to control.

When an employee moves cities during the financial year, calculate the periods separately rather than applying one city type to the whole year. A transfer can change the applicable percentage while salary and rent also change.

For Government payroll HRA by X/Y/Z city class, use the HRA Calculator. Tax Metro/Non-Metro and Government X/Y/Z classification are different systems.

💰 Basic Pay, DA and Salary Base

The Basic field should contain the salary component used for HRA tax purposes, not annual CTC or full gross salary. Adding allowances into Basic can inflate both Amount 2 and the 10% salary threshold in Amount 3.

DA should be entered only when it belongs in the salary base represented by the page. Private-sector employees may often enter zero, while some salary structures can include a separate DA component.

Use the DA Calculator to verify DA separately. Government employees who need to confirm Basic Pay from a matrix stage can use the Pay Matrix Calculator first.

A reliable HRA calculation uses salary figures from the same period as the rent claim rather than mixing current Basic Pay with an older rent period.

🏠 Rent Paid and the Limiting Rule

The source page emphasizes that Amount 3 is often the limiting factor. It equals annual rent paid minus 10% of annual Basic + DA, subject to a minimum of zero.

If rent is only slightly above the 10% threshold, the exemption can be much lower than the HRA received. This is why large HRA components do not automatically translate into equally large tax-free amounts.

Use actual documented rent rather than an estimated figure. Rent receipts, agreement details and bank-payment records make it easier to support the amount later.

If rent changes during the year, calculate each stable period separately. A single average rent can hide the fact that the minimum rule changed during the year.

⚖️ Old Regime vs New Regime

The calculator’s regime toggle is designed to show that HRA exemption belongs to the Old Regime path represented in the source. Selecting New Regime hides the normal exemption workflow and shows the warning panel.

A regime comparison should therefore use the same salary and rent assumptions on both sides. Save the HRA exemption under Old Regime first, then compare full annual tax using a broader tax or take-home calculator.

Do not decide between regimes only from the HRA amount. Other deductions, standard deduction, slab rates, rebate and additional income can change the final result.

The HRA tool answers one component of the tax decision; it does not replace a complete annual income-tax calculation.

📋 Section 80GG: When HRA Is Not Received

The page includes a separate Section 80GG calculator for people who pay rent but do not receive HRA from an employer. It compares the three limits represented in the source and chooses the lowest deduction.

This route should not be mixed with Section 10(13A). If HRA is actually received, the HRA exemption formula is the relevant path shown by the page rather than 80GG.

The source also lists eligibility conditions and documentation requirements for 80GG. Use the calculator only after confirming that the employee or taxpayer falls into the no-HRA scenario.

Keep the Section 80GG result separate from salary HRA because one is a deduction route for rent paid without HRA, while the other is an exemption against HRA received.

📊 Reading the Breakdown Bar and Monthly Table

The green/red breakdown bar visualizes how much of total HRA is exempt versus taxable. It is a quick composition aid, while the exact rupee values are shown in the result rows below.

The monthly table converts the annual calculation back into monthly equivalents so the result can be compared with payslips or monthly budgeting.

If the bar looks unexpected, check the three annual amounts first. A small green segment usually means the rent-based or city-based ceiling is far below the annual HRA received.

The monthly view should be treated as a presentation of the annual calculation, not as a separate formula.

🧾 Documents and Record-Keeping

Keep rent receipts, rent agreement and payment evidence for the period used in the calculator. If the source page requires landlord details or PAN at a certain rent level, keep that documentation with the annual HRA working.

Store the result with the same financial year’s salary statement or Form 16 so Basic, DA and HRA received can be traced back to employer records.

If salary, city or rent changed during the year, save a separate calculation for each period and note the effective dates. This creates a clear audit trail instead of one blended annual estimate.

For taxpayers using 80GG, keep the separate declaration or form referenced by the source together with the deduction working.

🏡 HRA Exemption and Home Loan Planning

The source page discusses situations where HRA exemption and home-loan tax benefits can both be relevant. These are separate calculations and should be evaluated independently.

Use the HBA Calculator only for Government House Building Advance eligibility and repayment. HBA is a borrowing tool, not an HRA tax-exemption calculator.

If you own property but rent elsewhere, keep ownership and actual rent evidence clearly separated. The HRA calculator itself only applies the salary-and-rent formula to the inputs provided.

Do not add home-loan interest to the HRA exemption figure. Both should remain separate components in any wider tax comparison.

⚠️ Common HRA Tax Exemption Mistakes

A common mistake is entering gross salary instead of Basic + applicable DA. This changes both Amount 2 and Amount 3 and can materially distort the result.

Another mistake is assuming the tax-slab chips determine the HRA exemption. They do not; they are used only for the estimated tax-saving figure after the exempt amount has been calculated.

Users may also select Metro expecting the whole HRA to become tax-free. The lowest of all three amounts still controls the exemption.

Finally, Section 80GG should not be used when HRA is received, and New Regime results should not be mixed with Old Regime exemption figures.

✅ HRA Tax Exemption Verification Checklist

Before accepting the result, confirm tax regime, monthly Basic, applicable DA, HRA received, rent paid, city type and the tax-slab estimate.

Then review Amount 1, Amount 2 and Amount 3, confirm which card is highlighted as the minimum, and compare exempt HRA with taxable HRA.

If an employer’s Form 16 or TDS working differs, check the calculation period, city classification and rent evidence before changing the final exemption manually.

Keep a dated copy with supporting salary and rent records so future tax-return or payroll reconciliation can be reproduced accurately.

Frequently Asked Questions

HRA tax exemption rules, new 2026 changes, and common filing queries

What is the HRA exemption formula under Section 10(13A)?▾
The tax-exempt HRA is the lowest of three amounts: (1) Actual HRA received from employer, (2) 50% of Basic+DA for metro cities or 40% for non-metro cities, and (3) Actual rent paid minus 10% of Basic+DA. All three are calculated on an annual basis. Whichever is lowest is your tax-free HRA. Any HRA above this amount is fully taxable as salary income.
Which cities qualify for 50% HRA exemption in 2026?▾
From April 1, 2026, 8 cities qualify for the 50% HRA exemption rate under new Income Tax Rules: Delhi, Mumbai, Chennai, Kolkata (original metros) plus Bengaluru, Pune, Hyderabad, and Ahmedabad (newly added from 2026). All other cities and towns continue at 40%. This is particularly beneficial for IT employees in Bengaluru — their HRA exemption rate has jumped from 40% to 50%, potentially saving ₹50,000–₹1,50,000+ annually.
Can I claim HRA exemption if I stay in my own house?▾
No. HRA exemption requires you to be paying actual rent for residential accommodation. If you own and live in your own house, no rent is being paid, so Amount 3 (Rent − 10% Salary) becomes zero or negative — resulting in zero exemption. Your entire HRA received becomes taxable. However, if you own a house in a different city and are renting accommodation in your city of work, you can claim both HRA exemption AND home loan tax benefits simultaneously.
What documents do I need to claim HRA exemption?▾
You need: (1) Rent receipts for all months (name, address, amount, landlord signature), (2) Rent agreement signed by both parties, (3) Bank statements showing rent transfers (cash rent above ₹8,333/month is risky), (4) Landlord’s PAN if annual rent exceeds ₹1,00,000, and (5) Form 124 (replaced Form 12BB from April 2026) submitted to your employer. ITR filing itself doesn’t need physical submission of documents, but you must retain them for up to 6 years for scrutiny purposes.
Is HRA exemption available in the New Tax Regime?▾
No. HRA exemption under Section 10(13A) is exclusively available in the Old Tax Regime. If you opt for the New Tax Regime (which is the default from FY 2023-24 unless you explicitly choose Old), your entire HRA is taxable as salary income — no matter how much rent you pay or which city you live in. Section 80GG (for employees without HRA) is also unavailable under the New Regime. Employees with significant HRA often benefit from sticking to the Old Regime.
Can I pay rent to my parents and claim HRA?▾
Yes — paying rent to parents is a valid and commonly used tax strategy. Conditions: (a) a formal rent agreement must exist, (b) rent must be transferred via bank (not cash above ₹8,333/month), (c) parents must declare it as rental income in their ITR, and (d) if parents are senior citizens in a lower tax bracket, the family’s overall tax burden reduces. From 2026, this relationship must be disclosed in Form 124 submitted to your employer. You cannot pay rent to your spouse — that is explicitly disallowed.
What is Section 80GG and who can claim it?▾
Section 80GG allows a deduction for rent paid by employees who do not receive HRA from their employer. The deduction is the lowest of: ₹5,000/month (₹60,000/year), 25% of Adjusted Total Income, or (Rent Paid − 10% of ATI). Eligibility: you must not own a house at the work location (or spouse/minor child), must not receive HRA under Section 10(13A), must be paying rent for residential accommodation, and must file Form 10BA before ITR. Not available under the New Tax Regime.
What happens to HRA if I work from home and pay rent?▾
If you work from home and pay rent for the same residential property, you can still claim HRA exemption — the exemption is for residential rent, not office rent. There is no restriction on claiming HRA if you work remotely from a rented house. You must still satisfy all standard conditions: actual rent paid, landlord PAN if required, and Old Regime selection. If your employer provides HRA as part of CTC but you work from a home you own, the HRA becomes fully taxable as no rent is being paid.
My HRA is higher than my rent. How much is exempt?▾
When HRA received is higher than rent paid, Amount 3 (Rent − 10% Salary) typically becomes the lowest and thus the limiting factor. Example: Basic ₹60,000, HRA ₹24,000/month (₹2,88,000/year), Rent ₹15,000/month in Metro. Amount 1 = ₹2,88,000 | Amount 2 = ₹3,60,000 | Amount 3 = ₹1,80,000 − ₹72,000 = ₹1,08,000. Exempt = ₹1,08,000 only. The remaining ₹1,80,000 of HRA is taxable. To increase exemption, you need to pay higher rent.
Can I claim HRA exemption while also claiming home loan deduction?▾
Yes — you can claim both simultaneously if your owned property and rented accommodation are in different cities. For example: own a house in your home town (claim home loan interest u/s 24b + principal u/s 80C) while renting in Mumbai for work (claim HRA exemption u/s 10(13A)). Both claims are legally valid and commonly accepted by the Income Tax Department. However, if you own a house in the same city where you work but choose to rent elsewhere in the same city, the claim may face scrutiny and should be supported with a valid explanation.
Disclaimer: This calculator provides estimates based on Section 10(13A) of the Income Tax Act, 1961 and Income Tax Rules updated for 2026. City classifications for 50% exemption are effective April 1, 2026. For personalised tax advice, consult a Chartered Accountant or visit incometax.gov.in.