HRA Exemption Calculator — How Much of Your House Rent Allowance Is Tax-Free
Enter basic salary, dearness allowance, HRA received and rent paid to see the exempt HRA under section 10(13A) and Rule 2A — the least of HRA received, rent paid less 10% of salary, and 50% (metro) or 40% (other city) of salary — with the taxable balance and the proof your employer will ask for.
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The rule
Under section 10(13A) and Rule 2A, the exempt HRA is the least of: the HRA actually received; rent paid less 10% of salary; and 50% of salary if the house is in Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad, otherwise 40%. The Income-tax Rules, 2026 added the last four cities from FY 2026-27; for FY 2025-26 and earlier only the first four qualify, so choose “Any other city” for Bengaluru, Hyderabad, Pune or Ahmedabad when working out an earlier year. “Salary” for this purpose is basic pay plus dearness allowance that counts for retirement benefits plus commission at a fixed percentage of turnover. The exemption is available only under the old tax regime and only for the months in which rent was actually paid for accommodation you occupy; it is not available if you live in your own house or pay no rent. Thane and Navi Mumbai are not metros for this rule even though they are part of the Mumbai region. Your employer will ask for rent receipts, the rental agreement, and the landlord’s PAN where rent exceeds ₹1 lakh a year; where rent paid to a resident landlord exceeds ₹50,000 a month, an individual or HUF tenant must deduct TDS at 2% under section 393 (194-IB of the 1961 Act) and give the landlord Form 16C (for an NRI landlord, section 393 (195) applies instead). Compare regimes with our old vs new calculator.
Disclaimer. These calculators are provided for general information only. They apply the Indian and UAE tax rules as we understand them for the year stated and are not legal, tax or professional advice, and they do not create a client relationship. Your actual liability depends on your complete facts, on documents we have not seen and on law that changes; please confirm any figure with us before relying on it or acting on it. I. H. Khan and Associates accepts no liability for decisions taken on the basis of these tools. Nothing you enter leaves your browser unless you choose to send the result to us. Section numbers are those of the Income-tax Act, 2025, in force from 1 April 2026, with the familiar 1961 Act number in brackets; the rules are unchanged — see our section map.
Questions we are asked
How is the HRA exemption calculated? Under section 10(13A) and Rule 2A, the exempt HRA is the least of the HRA actually received, rent paid less 10% of salary, and 50% of salary for a house in Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad (40% elsewhere). The last four cities get 50% from FY 2026-27 under the Income-tax Rules, 2026; up to FY 2025-26 only the first four did. Salary means basic pay plus retirement-counting dearness allowance plus commission at a fixed percentage of turnover.
Can I claim the HRA exemption under the new tax regime? No. The HRA exemption is available only under the old tax regime, and only for the months in which rent was actually paid for accommodation you occupy. It is not available if you live in your own house or pay no rent.
Is Thane a metro city for the HRA exemption? No. Thane and Navi Mumbai are not metros for the HRA rule even though they are part of the Mumbai region, so the 40% limit applies. From FY 2026-27 the 50% limit applies to houses in Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad (only the first four up to FY 2025-26).
What proof does an employer need for HRA, and when must a tenant deduct TDS on rent? Employers ask for rent receipts, the rental agreement, and the landlord's PAN where rent exceeds ₹1 lakh a year. Where rent paid to a resident landlord exceeds ₹50,000 a month, an individual or HUF tenant must deduct TDS at 2% under section 393 (194-IB) and give the landlord Form 16C; for an NRI landlord, TDS under section 393 (195) applies instead.
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