About the HRA Exemption
This HRA exemption calculator works out how much of your House Rent Allowance is exempt from income tax under Section 10(13A). Enter your monthly basic salary plus dearness allowance, the HRA you receive and the rent you pay, choose metro or non-metro, and the tool shows the exempt amount, the taxable amount and which of the three limits applied.
It is for salaried employees who live in rented accommodation and want to plan their tax, and for HR and payroll teams handling investment declarations. Founders and small-business owners who draw a salary from their own company can also use it to decide how to structure HRA within their pay.
The exemption is the lowest of three figures: the HRA actually received; the rent paid minus 10% of salary; and 50% of salary in a metro city or 40% elsewhere. The tool treats Delhi, Mumbai, Kolkata and Chennai as metros. The exemption is available only under the old tax regime and only if you actually pay rent.
How to use it
- 1Enter your monthly basic salary plus dearness allowance.
- 2Enter the HRA you receive each month and the rent you pay each month.
- 3Select Metro if you live in Delhi, Mumbai, Kolkata or Chennai; otherwise select Non-metro.
- 4Read the exempt HRA, the taxable HRA and the highlighted limit, then annualise the figures for your tax return.
How this is calculated
Exempt HRA = the least of: (a) actual HRA received; (b) rent paid − 10% of salary; (c) 50% of salary in a metro city, or 40% in a non-metro city. Salary = basic pay + dearness allowance. Taxable HRA = HRA received − exempt HRA. All figures in the tool are monthly.
Frequently asked questions
How is HRA exemption calculated?
It is the least of three amounts: the HRA you actually receive, the rent you pay minus 10% of your salary, and 50% of salary in a metro or 40% in a non-metro city. With a salary of ₹40,000, HRA of ₹18,000 and rent of ₹20,000 in a metro, the exemption is ₹16,000 a month.
Which cities are treated as metro in this HRA exemption calculator?
The tool treats Delhi, Mumbai, Kolkata and Chennai as metro cities, where the limit is 50% of salary. Every other city is treated as non-metro, with a 40% limit. Tax rules of this kind are revised from time to time, so confirm the position for your tax year with your employer or tax adviser.
Can I claim HRA exemption under the new tax regime?
No. As the tool notes, the HRA exemption is available only under the old tax regime. If you opt for the new regime, the whole HRA is taxable, whatever rent you pay. Compare your total tax under both regimes before choosing, because the better option depends on all your deductions taken together.
What if my rent is less than 10% of my salary?
The second limit — rent paid minus 10% of salary — becomes zero, and since the exemption is the lowest of the three amounts, no HRA is exempt. The calculator then shows the entire HRA as taxable. The exemption starts to help only once your rent exceeds one-tenth of your basic salary plus DA.
Do I need rent receipts or my landlord's PAN?
Employers normally ask for rent receipts or a rent agreement as proof before they allow the exemption. As noted in the tool, if the rent exceeds ₹1,00,000 a year, the landlord's PAN must also be reported. Keep proof of payment, preferably through bank transfers, in case the claim is examined later.
The figures are monthly. How do I use them for the whole year?
Multiply the monthly exemption by the number of months for which you paid rent and received HRA. If your salary, HRA, rent or city changed during the year, work out each period separately and add the results, because the least-of-three test has to be applied to each period on its own.