An HRA (House Rent Allowance) exemption calculator determines the tax-free portion of the HRA you receive from your employer.
About this calculator
An HRA (House Rent Allowance) exemption calculator determines the tax-free portion of the HRA you receive from your employer. The exemption is the minimum of three values: the actual HRA received, 50% of basic salary for metro cities (40% for non-metro), and the rent paid in excess of 10% of basic salary.
Many salaried employees receive HRA but do not claim the full tax exemption because they miscalculate the three-limit rule or are unaware of the city classification. This calculator does the three-way comparison for you, showing both the annual exempt amount and the taxable HRA that must be included in your gross income for tax computation. Note that HRA exemption is available only under the old tax regime.
Common uses
- Calculate how much HRA is tax-exempt under Section 10(13A) before filing ITR
- Decide the optimal rent amount that maximizes HRA exemption
- Check if your city is classified as metro (50% limit) or non-metro (40% limit)
- Determine how much taxable HRA to add back into gross income for tax calculation
- Plan your housing budget knowing the post-tax cost of your rent
Frequently asked questions
Which cities are classified as metro for HRA calculation in India?
For HRA exemption, the metro cities are Delhi, Mumbai, Kolkata, and Chennai. For these cities, the exemption limit is 50% of basic salary. All other cities — including Bengaluru, Hyderabad, Pune, and Ahmedabad — are treated as non-metro, with a 40% limit. This classification has not changed since 1995 despite many cities growing significantly.
How is HRA exemption calculated?
HRA exemption = Minimum of: (1) Actual HRA received from employer, (2) 50% of basic salary for metro / 40% for non-metro, (3) Rent paid minus 10% of basic salary. The smallest of these three amounts is tax-exempt. Any HRA beyond this is added to your taxable salary.
Do I need rent receipts to claim HRA exemption?
Yes. For annual rent above ₹1 lakh (i.e., more than ₹8,333/month), you must provide the landlord's PAN to your employer. Below this threshold, rent receipts are sufficient. Keep rent receipts for the entire financial year as your employer or the income tax department may request them.
Can I claim HRA if I stay in my own home?
No. HRA exemption applies only if you are actually paying rent. If you live in your own home, you cannot claim HRA, even if you are receiving it as part of your salary. In that case, the entire HRA received becomes taxable. However, you can still claim Section 24(b) benefits on a home loan.
Is HRA exemption available under the new tax regime?
No. HRA exemption under Section 10(13A) is not available if you opt for the new tax regime. Under the new regime, your entire HRA becomes part of taxable income. This is a key consideration when deciding between the old and new tax regimes — if you pay high rent, the old regime may save more tax.