HRA Calculator
HRA Calculator
§10(13A) exemption · old tax regime onlyIf annual rent exceeds ₹1 lakh, the landlord's PAN is mandatory in your tax filing.
City type
Only Mumbai, Delhi, Chennai, Kolkata qualify as metros under §10(13A). Bengaluru, Hyderabad, Pune, Gurgaon all use 40%.
Your tax slab (old regime)
HRA exemption only applies in the old tax regime. New regime ignores HRA.
HRA Exemption (Annual)
₹2.4 L
₹60,000 HRA still taxable · ₹72,000 tax saved
The three rules — exemption is the lowest
1. Actual HRA received
₹3 L
3. 50% / 40% of Basic+DA
₹3 L
The HRA exemption rule, in detail
Section 10(13A) lets you exempt a portion of the House Rent Allowance from tax — provided you actually pay rent. The exempt amount is the minimum of three values:
- The actual HRA component received from your employer.
- The rent you paid minus 10% of your (Basic + DA) for the year.
- 50% of (Basic + DA) for metro cities OR 40% for non-metros.
Whichever of the three is smallest is your exemption. The remainder of the HRA you received is added back to taxable income and taxed at your slab rate.
What counts as "metro"
Only four cities qualify: Mumbai, Delhi, Kolkata, Chennai. Every other city — Bengaluru, Hyderabad, Pune, Ahmedabad, Gurgaon, Noida, Chandigarh, all of them — uses the 40% non-metro rate. This list comes from §10(13A) directly and has not been expanded despite repeated industry requests.
Old vs new regime
HRA exemption is one of the deductions removed in the new tax regime (§115BAC). If you live in rented accommodation and want HRA benefit, the old regime is the only path. Many salaried payers run both regimes side-by-side at year-end: if HRA + §80C + §80D push old-regime tax below new-regime tax, stay in old; otherwise the new regime's lower headline rates usually win — especially after Budget 2026 raised the §87A rebate threshold to ₹12 lakh.
Documentation you must keep
- Rent receipts (monthly is standard practice; quarterly is acceptable).
- Rent agreement signed by both parties — even one-line declarations work, but a typed agreement is the safer evidence.
- Proof of payment — bank transfer / UPI is the gold standard. Cash payments above ₹5,000 per receipt need revenue stamps.
- If annual rent > ₹1 lakh: the landlord's PAN is mandatory in your tax filing. If they don\'t have a PAN, Form 60 declaration from them.
- If you pay rent to a parent: bank transfer + ensure they declare the rental income in their own ITR.
Edge cases worth knowing
- HRA + home loan simultaneously: allowed if you own in one city and rent in another, or if your owned house is rented out / genuinely uninhabitable.
- No HRA in salary: §10(13A) doesn\'t apply. Use §80GG instead — but it caps at ₹60,000/year, much less than HRA.
- Partial-year: if rent or salary changes mid-year, compute month-by-month and sum. This calculator assumes a flat full-year scenario.
- Working from home with company-provided accommodation: no rent paid, no HRA exemption — even if HRA shows in your payslip.
§10(13A) and §80GG rules verified 2026-05-28 against the Income Tax Act. Surcharge and cess built into the calculator's tax-saved figure assume the FY 2026-27 old regime structure.
FAQs
HRA (House Rent Allowance) is a salary component paid to cover rented accommodation. Under §10(13A) of the Income Tax Act, part of the HRA you receive can be exempt from tax if you actually pay rent. The exemption is the lower of three values, so it depends on your salary structure, the rent you pay, and whether you live in a metro city.
HRA exemption = minimum of: (1) actual HRA received; (2) rent paid − 10% of Basic + DA; (3) 50% of Basic + DA for metro cities (Mumbai, Delhi, Chennai, Kolkata) or 40% for non-metros. Whichever of the three is smallest is your exemption — the rest of the HRA becomes taxable at your slab rate.
Only four — Mumbai, Delhi, Chennai, and Kolkata — qualify for the 50% rate. Every other city, including Bengaluru, Hyderabad, Pune, Ahmedabad, and Gurgaon, uses the 40% non-metro rate. This list is in §10(13A) and hasn't been expanded despite repeated requests from taxpayer groups.
No. HRA exemption is one of the deductions removed in the new regime (§115BAC). If you pay rent and want HRA benefit, the old regime is the only option. Run both regimes side-by-side: if HRA + 80C + 80D deductions push your old-regime tax below the new-regime tax, stay in old; otherwise the new regime's simpler structure usually wins.
Standard documents: rent receipts (typically monthly), the rent agreement, and proof of rent payment (bank transfer or UPI is preferred — cash rent above ₹5,000/month per receipt needs revenue stamps). If annual rent exceeds ₹1 lakh, your landlord's PAN is mandatory; if they don't have one, a Form 60 declaration from them is required. Many employers require these to be submitted at year-end during proof investment declaration.
Yes, but only if (1) the parents own the house, (2) you genuinely pay rent via bank transfer (not just on paper), (3) the parents declare the rental income in their ITR. The arrangement must be commercial — if income tax authorities see a circular money flow with no real rent, the claim can be disallowed. Many salaried payers do this legitimately when living in a family home.
Yes, in specific situations: (1) you own a house in one city but work and rent in another — both HRA and §24(b) home loan interest are allowed; (2) you own a house but it's rented out or genuinely uninhabitable for work reasons. If you live in your own house, you cannot claim HRA — you don't pay rent.
If your offer letter / payslip has no HRA component, the §10(13A) exemption isn't available regardless of how much rent you pay. The alternative is §80GG, which allows up to ₹5,000 per month (₹60,000/year) deduction for rent paid by anyone who doesn't receive HRA. §80GG is much smaller than HRA — most salaried payers ask HR to restructure salary to include HRA instead.
The Income Tax Department can ask for proof. Bank-transfer rent payments are the safest. Receipts with the landlord's name, address, PAN (if rent > ₹1L/yr), and signed acknowledgment are standard. Recent (post-2024) audits have flagged cases where rent is paid in cash without proof — the deduction got disallowed and tax with interest added.
Calculate HRA exemption month-by-month if your rent or salary changed mid-year. Sum the monthly exemptions for the final number. The 3-rule formula still applies — but you apply it to each "phase" (each combination of Basic+DA, HRA, rent, metro/non-metro status). For an entire-year flat scenario, the annual calculation in this calculator is correct.