HRA Exemption Calculator
Basic + DA, HRA received and rent paid — and how much of your HRA is tax-free and how much is taxable.
Result
- 1. HRA received
- ₹20,000.00
- 2. Rent − 10% of basic
- ₹17,000.00
- 3. 50% of basic
- ₹25,000.00
- HRA exemption / month
- ₹17,000.00
- Taxable HRA / month
- ₹3,000.00
- Exemption for the year
- ₹2,04,000.00
The least of the three is exempt. Available only in the old tax regime.
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Quick answer
HRA full form is House Rent Allowance. HRA exemption = least of: (1) HRA received, (2) rent paid − 10% of basic + DA, (3) 50% of basic + DA in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad, 40% elsewhere. From 1 April 2026 the 50% list has 8 cities. The exemption is available only in the old tax regime.
| HRA full form | House Rent Allowance |
|---|---|
| 50% cities (from 1 Apr 2026) | Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad |
| Elsewhere | 40% of basic + DA |
| Tax regime | Old regime only |
House Rent Allowance is the part of salary an employer pays towards rent. If you live in rented accommodation and choose the old tax regime, part or all of it is exempt from income tax.
The Income-tax Rules, 2026 — in force from 1 April 2026 under the new Income-tax Act, 2025 — added Bengaluru, Hyderabad, Pune and Ahmedabad to the cities that get the 50% limit. Rates and limits as of 12 October 2026.
The formula
- Limit 1
Actual HRA received- Limit 2
Rent paid − 10% of (Basic + DA)- Limit 3
50% of (Basic + DA) in 8 metros, 40% elsewhere- HRA exemption
Least of the three; the rest of the HRA is taxable
HRA exemption calculation example
Basic + DA ₹50,000 a month, HRA ₹20,000, rent ₹22,000 in Pune. Limit 1 = ₹20,000. Limit 2 = 22,000 − 5,000 = ₹17,000. Limit 3 = 50% × 50,000 = ₹25,000 (Pune is now a 50% city). Exemption = ₹17,000 a month; ₹3,000 of HRA is taxable.
Before April 2026 Pune was a 40% city — limit 3 would have been ₹20,000, which in this example does not change the answer, but it does for anyone whose rent is high relative to basic.
What 'salary' means for HRA
Salary for HRA is basic pay plus dearness allowance (where it counts for retirement benefits) plus any commission fixed as a percentage of turnover. Other allowances are left out. Calculate month by month if your salary or rent changed during the year.
Old regime only — and what to give your employer
The new tax regime, which is the default, does not allow the HRA exemption. If you opt for the old regime, give your employer rent receipts and, where annual rent exceeds ₹1 lakh, the landlord's PAN. Paying rent to a parent is allowed if they actually own the house and declare the rent as income.
Questions people ask.
What is the full form of HRA in salary?
House Rent Allowance — the component of salary paid towards the employee's rented accommodation.
How is HRA exemption calculated?
It is the least of the HRA received, rent paid minus 10% of basic + DA, and 50% (8 metro cities) or 40% (elsewhere) of basic + DA.
Which cities get 50% HRA exemption from 2026?
Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad, from 1 April 2026 under the Income-tax Rules, 2026.
Can I claim HRA in the new tax regime?
No. The HRA exemption is available only if you choose the old tax regime.
Is the landlord's PAN required for HRA?
Yes, if the rent paid in the year exceeds ₹1 lakh.
What if I do not live in a rented house?
Then no exemption is available and the whole HRA is taxable as part of salary.
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