Calculator
HRA Exemption Calculator
Find the tax-free portion of your House Rent Allowance and the annual tax saving under the old regime.
City Type
Your Tax Slab
Monthly Exempt HRA
₹13,000
Lowest of the three rules below
Annual Tax Saving
₹46,800
At 30% slab
Taxable HRA
₹7,000
Added to salary (per month)
The three rules
- 1. HRA received — ₹20,000
- 2. Rent − 10% basic — ₹13,000
- 3. 50% of basic — ₹25,000
Monthly Exempt HRA
₹13,000
Frequently asked questions
HRA exemption is the least of: (1) HRA actually received, (2) Rent paid minus 10% of basic salary, (3) 50% of basic salary if you live in a metro, 40% otherwise. Whichever is smallest is your tax-free portion.
Only Mumbai, Delhi, Kolkata, and Chennai count as "metro" for HRA exemption — they qualify for the 50% rate. Bangalore, Hyderabad, Pune, Ahmedabad, and all others are non-metro and qualify for 40%, even though they are large urban centres.
For rent up to ₹3,000 per month, no receipts are needed. Above that, monthly receipts are required, and for rent above ₹1 lakh per year, you must additionally provide the landlord's PAN. Without these, the assessing officer can disallow the exemption.
No. HRA exemption is available only if you actually pay rent for accommodation that you do not own. You can, however, pay rent to your parents (and they declare the rental income) — this is a legitimate planning route many Indian families use.
No. The exemption is capped by the least-of-three rule above. Any HRA you receive over the exempt portion is added to your taxable salary. HRA exemption is also not available under the new tax regime — only under the old regime.
How HRA exemption works
House Rent Allowance is one of the largest tax-saving tools for salaried Indians on the old regime. Section 10(13A) lets you deduct the lowest of: HRA actually received; rent paid in excess of 10% of basic salary; or 50% (metro) / 40% (non-metro) of basic salary. Whichever rule gives you the lowest amount is the exemption.
Metro versus non-metro
For HRA, "metro" means only Mumbai, Delhi, Kolkata, and Chennai. Bangalore, Hyderabad, Pune, and Ahmedabad — though large — fall under the 40% rule. This is purely an Income Tax classification, unrelated to other definitions you may see.
Things to keep in mind
- Rent paid without a valid receipt risks disallowance — keep monthly receipts for rent above ₹3,000.
- For rent above ₹1 lakh a year, you must report the landlord's PAN to your employer.
- HRA exemption is not available under the new tax regime — only the old regime.
Disclaimer: Calculations follow Section 10(13A) and Rule 2A of the Income Tax Act. Tax saving is indicative based on the slab you select; your effective rate may differ after cess, surcharge, and other deductions.
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