Calculate your House Rent Allowance (HRA) tax exemption based on your basic salary, DA, HRA received, rent paid, and whether you live in a metro city.
How to Use the HRA Calculator
Enter your "Basic Salary" and "DA" (Dearness Allowance) per month.
Enter the "HRA Received" and "Rent Paid" per month.
Select whether you live in a "Metro" or "Non-Metro" city.
Click "Calculate HRA Exemption" to see your tax-exempt HRA and taxable HRA, both monthly and annually.
The Three-Limit Rule
Not all of your HRA is tax-free. The exempt part is the lowest of three amounts, worked out on "salary", which for HRA means Basic plus the DA that counts for retirement benefits:
The HRA your employer actually pays you.
Rent you pay minus 10% of salary.
50% of salary if you live in Delhi, Mumbai, Kolkata or Chennai, or 40% anywhere else.
Whatever HRA is left over after the exemption is added to your taxable salary. The calculator does this month by month and multiplies by 12, so it assumes your salary, HRA and rent stay the same all year. If any of them changed mid-year (an increment, a move to a new flat), work out each period separately and add them up.
Worked Example
You work in Pune (non-metro) with a basic salary of ₹60,000 a month, no DA, HRA of ₹30,000 a month, and you pay ₹25,000 a month in rent.
HRA received: ₹30,000
Rent − 10% of salary: 25,000 − 6,000 = ₹19,000
40% of salary: ₹24,000
The lowest is ₹19,000, so ₹19,000 a month (₹2,28,000 a year) is exempt and the remaining ₹11,000 a month (₹1,32,000 a year) is taxable. Here the rent is what limits the exemption.
How Rent and City Change the Exemption
Monthly exemption for the same salary (basic ₹60,000, HRA ₹30,000) at different rents:
Monthly rent
Metro city
Non-metro city
₹10,000
₹4,000
₹4,000
₹20,000
₹14,000
₹14,000
₹30,000
₹24,000
₹24,000
₹40,000
₹30,000
₹24,000
At lower rents, the city makes no difference because the rent limit is the smallest of the three. The 50% versus 40% limit only matters when rent is high compared with your salary. Once rent − 10% of salary is more than the HRA you receive, paying more rent does not increase the exemption.
Claiming HRA: Practical Points
HRA exemption is available only under the old tax regime. If you opt for the new regime, the whole HRA is taxable, which is one of the main things to weigh when choosing a regime.
Keep rent receipts and a rent agreement. Employers usually ask for the landlord's PAN when the annual rent is more than ₹1 lakh (about ₹8,333 a month).
Paying rent to your parents is allowed if you actually pay it, ideally by bank transfer, and they show it as income in their own return. Rent paid to a spouse is generally not accepted.
If you missed submitting proofs to your employer, you can still claim the exemption in your income tax return, provided you have the documents.
If you are self-employed or your salary has no HRA component, a separate deduction for rent paid (section 80GG under the old Act) may apply, subject to its own lower limits.
From 1 April 2026 the Income-tax Act, 2025 and new income-tax rules replace the old law, and the list of metro cities and section numbers is set by those rules. Check the current rules or ask your employer's payroll team if you are unsure which limit applies to your city.
Frequently Asked Questions
The HRA exemption is the lowest of: (1) HRA actually received, (2) rent paid minus 10% of Basic + DA, and (3) 50% of Basic + DA for metro cities or 40% for non-metro cities.
Traditionally, Delhi, Mumbai, Kolkata and Chennai get the 50% limit and every other city gets 40%, which is what this calculator uses. The list is set by the income-tax rules, so if you live in another large city, check whether the rules for your year have changed it.
If you enter zero rent, your HRA exemption will be zero (since "rent paid minus 10% of salary" becomes zero or negative), making your entire HRA received taxable.
No. The new regime does not allow the HRA exemption, so all the HRA you receive is taxed. Compare both regimes with the exemption figure from this calculator before deciding.
Yes, under the old regime, if you genuinely live in a rented house, for example because your own house is in another city or is still under construction. Keep evidence of both the rent and the loan, as such claims are often checked.