Use this HRA exemption calculator to work out how much of your house rent allowance is tax free, and how much is taxable. House rent allowance is one of the biggest tax breaks for salaried people in India, but it is only available if you file under the old tax regime.
Enter your monthly basic salary plus dearness allowance, the HRA you receive, the rent you pay, and whether you live in a metro city. The calculator applies the rule and shows your exemption right away.
How HRA exemption is calculated
Under Section 10(13A) and Rule 2A, your HRA exemption is the least of these three amounts:
- The actual HRA you receive from your employer.
- 50 percent of your salary if you live in a metro city, or 40 percent if you live anywhere else. The metro list expanded from four cities to eight from financial year 2026-27, as explained below.
- The rent you actually pay, minus 10 percent of your salary.
Here salary means your basic pay plus dearness allowance that counts for retirement benefits, plus any commission fixed as a percentage of turnover. Whatever comes out lowest is your exemption, and the rest of the HRA you receive is added to your taxable salary.
Which cities count as metro (now eight)
This list just got bigger. Under the Income-tax Rules notified by the CBDT for the new Income-tax Act, 2025, the 50 percent metro list was widened from four cities to eight, effective 1 April 2026, which is financial year 2026-27. The metro cities for HRA are now Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Every other city stays at 40 percent.
Watch the timing. When you file your return for financial year 2025-26 (by 31 July 2026), the old four city list still applies, so Bengaluru, Hyderabad, Pune and Ahmedabad are treated as non-metro at 40 percent for that year. The eight city rule applies from financial year 2026-27 onward, which is what this calculator uses. You can confirm the current position on the official income tax e-filing portal.
A quick example
Say you live in Mumbai, earn Rs 50,000 a month as basic plus DA, receive Rs 20,000 HRA a month, and pay Rs 25,000 rent a month. Over a year that is Rs 6,00,000 salary, Rs 2,40,000 HRA and Rs 3,00,000 rent. The three figures work out to Rs 2,40,000 (actual HRA), Rs 3,00,000 (50 percent of salary) and Rs 2,40,000 (rent minus 10 percent of salary). The least is Rs 2,40,000, so your full HRA is exempt and your taxable HRA is nil.
HRA and the old versus new regime
The new tax regime is now the default, and it does not allow the HRA exemption. To claim HRA you must opt for the old regime. Before you decide, it is worth comparing both with our old vs new regime calculator, because the lower slab rates of the new regime sometimes beat the deductions of the old one.
What you need to claim HRA
Keep rent receipts (you can make a full set with our rent receipt generator) and your rent agreement. If your total rent for the year is more than Rs 1,00,000, you must report your landlord's PAN to your employer or in your return. You can claim HRA even if you pay rent to a parent, as long as the arrangement is genuine and the parent reports the rent as income.
How to claim it
The simplest way is to declare your rent to your employer during the year so the exemption reflects in your Form 16. If you missed that, you can still claim it while filing your return. Not sure which form to use? Use our ITR form finder for AY 2026-27. If you also have other income to plan for, see the advance tax estimator and the capital gains tax calculator.
For the official rules, see the Income Tax Department guidance on the income tax e-filing portal.
This calculator gives an estimate for general guidance and is not tax advice. Special cases, part-year changes and commission-based salary can change the result, so confirm your figures with a qualified professional.
Frequently asked questions
Can I claim HRA under the new tax regime?
No. The HRA exemption under Section 10(13A) is available only under the old tax regime. If you choose the new regime, your full HRA is taxable.
How is HRA exemption calculated?
It is the least of three amounts: the actual HRA received, 50 percent of salary in a metro city or 40 percent elsewhere, and rent paid minus 10 percent of salary.
Which cities count as metro for HRA?
From financial year 2026-27, eight cities count as metro at 50 percent: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Earlier only the first four qualified, and for financial year 2025-26 returns those original four still apply.
Can I claim HRA if I pay rent to my parents?
Yes, if the arrangement is genuine and your parents declare the rent as their income. Keep proof such as rent receipts and bank transfers.
Do I need my landlord's PAN?
If your total rent for the year is more than Rs 1,00,000, you must provide your landlord's PAN to your employer or report it in your return.
Official reference: Income-tax Act, 2025 (as amended by the Finance Act, 2026), Income Tax Department.
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