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HRA exemption calculator

Enter your basic salary, HRA and rent from your payslip to see how much HRA is tax-free each year. Updated for tax year 2026-27, when eight cities qualify for the higher 50% limit.

From your payslip (per month)

Tax-free HRA per year

₹1,80,000

Taxable HRA: ₹1,20,000 · ₹15,000/month exempt

The exemption is the lowest of:

HRA received
₹3,00,000
Rent paid − 10% of salary
₹1,80,000
50% of basic + DA
₹3,00,000

HRA exemption is only available under the old tax regime.

How to use: HRA exemption calculator

  1. 1Enter your monthly basic salary plus dearness allowance (DA).
  2. 2Enter the monthly HRA shown on your payslip and the rent you actually pay.
  3. 3Choose your city. Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad get 50%.
  4. 4Read your tax-free HRA and see which of the three limits decided it.

Worked example

Basic + DA ₹50,000 a month, HRA ₹25,000 a month, rent ₹20,000 a month, living in Bengaluru (now a metro):

Limit Yearly amount
HRA received ₹3,00,000
Rent − 10% of basic + DA ₹2,40,000 − ₹60,000 = ₹1,80,000
50% of basic + DA ₹3,00,000

The lowest is ₹1,80,000, so that much HRA is tax-free and ₹1,20,000 is taxable. Before 2026, Bengaluru used the 40% limit; in this example the rent rule was already the deciding limit, so the result is unchanged. People paying high rent relative to salary gain the most from the change.

Getting the most from HRA

  • Rent matters most. The “rent minus 10% of salary” rule is often the deciding limit; paying more rent raises the exemption up to the other two limits.
  • Submit rent receipts to your employer on time so the exemption is applied in your TDS.
  • Compare regimes. Put your HRA exemption into the income tax calculator to check whether the old regime still beats the new one for you.

Frequently asked questions

Which cities count as metro for HRA now?

From tax year 2026-27, under the Income-tax Rules 2026 notified on 20 March 2026, eight cities get the 50% limit - Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. All other cities use 40%.

How is HRA exemption calculated?

The tax-free amount is the lowest of three figures - the HRA you receive, the rent you pay minus 10% of your basic plus DA, and 50% (metros) or 40% (other cities) of basic plus DA.

Can I claim HRA in the new tax regime?

No. HRA exemption is only available if you choose the old tax regime.

What if I pay rent to my parents?

It is allowed if you genuinely pay rent and they show it as income in their tax return. Keep rent receipts and a rental agreement.

Do I need my landlord's PAN?

Employers usually ask for the landlord's PAN if your rent is more than ₹1 lakh a year.