HomeTax & salary (India)
HRA exemption calculator
Find the tax-free part of your house rent allowance, using the three limits.
Quick answer
HRA is part of your salary, and the tax-free part is the least of three limits, if you pay rent and choose the old regime. Formula: Exempt HRA = the least of the three limits below, and not less than 0. With basic ₹50,000, HRA ₹20,000 and rent ₹22,000 a month in a metro city, ₹2,04,000 a year is exempt.
Read the guide: How to calculate HRA exemption, with the three limits
HRA exempt from tax
₹2,04,000
- HRA that is taxable
- ₹36,000
- Limit 1: HRA received
- ₹2,40,000
- Limit 2: rent minus 10% of salary
- ₹2,04,000
- Limit 3: 50% of salary
- ₹3,00,000
The smallest of the three limits is the rent you pay minus 10% of salary. Amounts are for the 12 months you lived there. HRA is exempt only if you choose the old tax regime; the new regime does not allow it.
Rules as of 2026-11-14: Tax year 2026-27 (Income-tax Rules, 2026). Sources: Income-tax Rules, 2026, rule 279 (the three limits and the metro cities), Income Tax Department FAQ: old vs new regime (HRA is not exempt in the new regime).
How is HRA exemption calculated?
HRA is part of your salary, but part of it can be tax-free if you pay rent. The tax-free part is the smallest of three amounts: the HRA you actually get, the rent you pay beyond a tenth of your salary, and a share of your salary (half in eight big cities, two-fifths elsewhere).
Salary for this rule is only your basic pay and dearness allowance (when your terms of employment include it). Other allowances, bonuses and perks are not counted. The figures are for the months you actually lived in the rented home during the tax year.
If the rent you pay is not more than a tenth of your salary, there is no exemption. HRA exemption is available only in the old tax regime; the new regime does not allow it, so compare both in the income tax calculator.
What is the formula for HRA exemption?
- Exempt HRA = the least of the three limits below, and not less than 0
- Limit 1: the HRA you actually receive
- Limit 2: the rent you pay minus one-tenth (10%) of your salary
- Limit 3: 50% of salary in Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru, 40% of salary anywhere else
- Salary here is basic pay plus dearness allowance (if your terms provide for it), for the months you lived there
Can you show a worked example of HRA exemption?
Basic ₹50,000, HRA ₹20,000 and rent ₹22,000 a month for 12 months in a metro city. Salary = ₹6,00,000, HRA received = ₹2,40,000, rent paid = ₹2,64,000. The limits are ₹2,40,000; ₹2,64,000 − ₹60,000 = ₹2,04,000; and 50% of ₹6,00,000 = ₹3,00,000. The least is ₹2,04,000, so ₹2,04,000 is exempt and ₹36,000 of the HRA is taxable.
How much HRA is exempt for common basic pay and rent?
Per month, for 12 months in a metro city, with HRA received equal to 40% of basic pay. HRA is exempt only in the old tax regime.
| Monthly basic pay | Rent ₹10,000 | Rent ₹20,000 | Rent ₹30,000 | Rent ₹40,000 |
|---|---|---|---|---|
| ₹20,000 | ₹96,000 | ₹96,000 | ₹96,000 | ₹96,000 |
| ₹30,000 | ₹84,000 | ₹1,44,000 | ₹1,44,000 | ₹1,44,000 |
| ₹50,000 | ₹60,000 | ₹1,80,000 | ₹2,40,000 | ₹2,40,000 |
| ₹75,000 | ₹30,000 | ₹1,50,000 | ₹2,70,000 | ₹3,60,000 |
| ₹1,00,000 | ₹0 | ₹1,20,000 | ₹2,40,000 | ₹3,60,000 |
Common questions
How is HRA exemption calculated?
It is the least of three amounts: the HRA you receive, the rent you pay minus 10% of your salary, and 50% (metro) or 40% of your salary.
Which cities get the 50% limit?
Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru, under rule 279 of the Income-tax Rules, 2026. Any other place gets 40%.
What counts as salary for HRA?
Basic pay plus dearness allowance, if your terms of employment provide for it. Other allowances and perquisites are left out.
Can I claim HRA in the new tax regime?
No. The Income Tax Department’s FAQ says the exemption is not available in the new regime.
What if I pay no rent, or very little?
If the rent is not more than one-tenth of your salary, the second limit is nil and nothing is exempt.