HRA Calculator — House Rent Allowance Exemption
Compute the tax-exempt portion of your HRA under Section 10(13A). Enter basic, DA, rent paid and HRA received — get monthly and yearly exempt HRA, plus the full three-rule formula.
Metro = Mumbai, Delhi, Chennai, Kolkata. Bengaluru, Hyderabad, Pune etc. are non-metro for HRA purposes.
Three rules — minimum is exempt
HRA exemption is the LOWEST of the three values below. Numbers are per month.
| Rule | Formula | Monthly | Yearly |
|---|---|---|---|
| A | Actual HRA received | ₹20,000 | ₹2,40,000 |
| B | Rent − 10% of (Basic + DA) | ₹13,000 | ₹1,56,000 |
| C | 50% of (Basic + DA) | ₹25,000 | ₹3,00,000 |
Highlighted row is the exemption (the minimum of the three). If Rule B comes out negative (rent < 10% of basic+DA), it's treated as zero — meaning no HRA exemption.
About this calculator
House Rent Allowance (HRA) is a salary component paid by employers to help employees cover rent. Under Section 10(13A) of the Income Tax Act, a portion of HRA is tax-exempt — the rest is taxed as regular salary. The exemption is computed per Rule 2A using a three-rule minimum: the smallest of actual HRA, rent minus 10% of basic+DA, and 50/40% of basic+DA. Whichever is lowest is your exemption.
The exemption is per-month — if your rent or salary changes mid-year, recompute for each window. Only the four classical metros qualify for 50%; Bengaluru, Hyderabad and Pune are non-metros for HRA purposes despite being major cities. HRA exemption is unavailable in the new tax regime, so if you have a high HRA component, the old regime may still be the better option for you.
Documentation matters. Rent receipts are mandatory; a revenue stamp is required for rent above ₹5,000/month; landlord PAN must be reported for annual rent above ₹1,00,000. If your employer denies the exemption for missing paperwork, you can still claim it while filing ITR — but be ready to substantiate during scrutiny.
How to calculate HRA (5 steps)
- Enter basic salary. Your monthly basic pay. This is the figure on your CTC/payslip — not gross salary, not in-hand.
- Enter DA (if applicable). Dearness Allowance, only if it forms part of retirement benefits. Most private-sector employees enter 0; government employees enter their DA.
- Enter HRA received. Monthly HRA component on your payslip, before any tax.
- Enter rent paid. Monthly rent you actually pay your landlord. Keep receipts and your landlord's PAN if annual rent exceeds ₹1,00,000.
- Pick city type. Metro (Mumbai/Delhi/Chennai/Kolkata) gets 50% of basic+DA; everywhere else (including Bengaluru, Hyderabad, Pune) is 40%.
Use cases
- Salary structuring — how much HRA is optimal for your rent?
- Old vs new regime decision — quantify the HRA you'd lose
- Form 12BB declaration to employer at year start
- Filing ITR-1 — exemption claim with rent receipts
- Relocation planning — metro vs non-metro impact
- Salary negotiation — splitting CTC across HRA, special allowance
- Joint HRA & home-loan-interest claim (different city)
- Section 80GG fallback if no HRA component exists
Frequently asked questions
+−How is HRA exemption calculated?
Per Section 10(13A) read with Rule 2A, exempt HRA is the LOWEST of three amounts: (a) actual HRA received, (b) rent paid minus 10% of basic salary plus DA, (c) 50% of basic+DA if you live in a metro (Mumbai, Delhi, Chennai, Kolkata) or 40% if non-metro. The calculator computes all three and highlights the minimum — that's your exemption.
+−Which cities are metro for HRA purposes?
Only four cities are 'metro' for HRA exemption: Mumbai, Delhi, Chennai and Kolkata. Bengaluru, Hyderabad, Pune, Ahmedabad, Gurgaon and all other cities are 'non-metro' and qualify for 40% (not 50%) of basic+DA in Rule C. This is despite many of these being treated as metros in other contexts (e.g. car allowance, real-estate classifications).
+−Can I claim HRA in the new tax regime?
No. HRA exemption under Section 10(13A) is only available in the old tax regime. If you opt for the new regime (default from FY 2023-24), HRA becomes fully taxable. Use the Old vs New Tax Regime Calculator to check whether sacrificing HRA for new-regime slabs leaves you better off.
+−Do I need rent receipts and a PAN of my landlord?
Yes. Rent receipts (with revenue stamp if rent > ₹5,000/month) are mandatory. If annual rent exceeds ₹1,00,000 (~₹8,333/month), you must also report your landlord's PAN to your employer. Without PAN, the employer will deny the exemption while computing TDS — though you can still claim it while filing ITR with rent receipts as proof.
+−Can I claim HRA if I pay rent to my parents?
Yes — if it's a genuine arrangement. The property must be owned by your parent(s) (not you), there must be an actual rent transfer (bank, not cash), and your parents must declare the rent as income on their ITR. If audited, the IT department will look for these proofs. Paying rent to a spouse usually fails the test as the property is treated as marital.
+−What if I don't get HRA but still pay rent?
If your salary doesn't include an HRA component, you can claim a deduction under Section 80GG instead — the lower of ₹5,000/month, 25% of total income, or rent paid minus 10% of total income. Note that 80GG, like HRA, is also unavailable in the new regime.
+−Can I claim HRA and home-loan interest at the same time?
Yes, in many cases. If you own a house in one city (paying loan EMI) but live in another city for work (paying rent), you can claim both HRA exemption (Section 10(13A)) and home-loan interest deduction (Section 24(b), up to ₹2L). If both house and job are in the same city, you'll need to justify why you don't live in your own house — IT officers do scrutinise this.
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