HRA exemption calculator
Work out the tax-exempt part of your house rent allowance (old regime).
HRA exempt (per month)
₹18,000
₹2,16,000 per year
Least of the three is exempt
Taxable HRA: ₹2,000 / month
Section 10(13A) of the Income Tax Act (old regime). Indicative only.
How it works
House Rent Allowance can be partly exempt from income tax for salaried employees who pay rent and choose the old tax regime. Under the new regime HRA is fully taxable.
From 1 April 2026 the Income-tax Act, 2025 replaces the Income-tax Act, 1961, so the familiar section 10(13A) becomes section 11 read with Schedule III. The least-of-three test is unchanged. From tax year 2026-27, rule 279 of the Income-tax Rules, 2026 extends the 50% limb from four cities to eight: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad.
Formula
- Exempt HRA = least of the three amounts below
- 1. Actual HRA received
- 2. 50% of basic + DA in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad (from tax year 2026-27), or 40% in other cities
- 3. Rent paid − 10% of basic + DA
- Taxable HRA = HRA received − exempt HRA
Worked example
Basic ₹50,000, HRA ₹25,000, rent ₹22,000, Mumbai (monthly)
- Actual HRA: ₹25,000
- 50% of basic: ₹25,000
- Rent − 10% of basic: ₹22,000 − ₹5,000 = ₹17,000
- Exempt HRA = ₹17,000 a month, taxable HRA = ₹8,000 a month
Common mistakes to avoid
- Claiming HRA exemption under the new tax regime, where it is not available.
- Using the old four-city list for tax year 2026-27: Bengaluru, Hyderabad, Pune and Ahmedabad now get the 50% limb too (rule 279, Income-tax Rules, 2026). Years before 2026-27 keep the four-city list.
- Not submitting rent receipts or the landlord's PAN (required when annual rent exceeds ₹1 lakh).
- Paying rent to a spouse, which tax authorities generally disallow.
HRA exemption calculator: FAQs
Can I claim HRA under the new tax regime?
No. HRA exemption is available only under the old regime. Under the new regime the full HRA is taxable.
Which cities count as metro for HRA?
From tax year 2026-27, eight cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad (rule 279 of the Income-tax Rules, 2026). Every other city uses the 40% limb. Earlier years used only Delhi, Mumbai, Kolkata and Chennai.
What if I live in my own house?
No rent is paid, so the third limb is zero and the full HRA is taxable.
Can I pay rent to my parents?
Yes, if the arrangement is genuine, rent is actually paid, and the parent reports it as income. Keep a rent agreement and bank records.
Related reading
- What is HRA? →
- HRA exemption explained →
- TDS on salary: old vs new regime →
- Payroll and TDS in NeevHR →
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