HRA Exemption Calculator
An HRA exemption calculator is a free online tool that computes the tax-exempt portion of your House Rent Allowance — the lower of three conditions per Section 10(13A) of the Income Tax Act.
Metro = Delhi, Mumbai, Kolkata, Chennai only
Note: HRA exemption is only available in the old tax regime. In the new regime, the full HRA is taxable. If rent exceeds ₹1 lakh/year, landlord's PAN is mandatory.
How to use HRA Exemption Calculator
- Enter basic salary — Type your annual basic salary.
- Enter HRA received — Annual HRA component from your employer.
- Enter rent paid — Annual rent you actually pay.
- Choose city type — Metro (Delhi/Mumbai/Kolkata/Chennai) or non-metro.
Key features
- All three conditions applied
- Metro vs non-metro comparison
- Exempt vs taxable HRA split
- Old regime calculation
- Annual tax impact estimate
- Rule explanation shown
What is HRA Exemption?
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 this HRA is tax-exempt if the employee actually pays rent. The exemption is the LOWEST of three specific conditions. This can save ₹50,000-1,50,000+ in taxes annually for salaried employees in metro cities.
The Three Conditions
HRA exemption = LEAST of: (1) Actual HRA received from employer. (2) Rent paid minus 10% of basic salary. (3) 50% of basic salary (metro: Delhi, Mumbai, Kolkata, Chennai) or 40% of basic (non-metro). All three are annual amounts. The lowest becomes your exempt HRA — the rest is taxable.
Metro vs Non-Metro Difference
Metros (Delhi, Mumbai, Kolkata, Chennai) allow 50% of basic as the max limit. Non-metros allow only 40%. This is why the same salary and rent can result in different exemptions. For example: basic = ₹10 lakh, rent = ₹4.8 lakh (₹40,000/month). Metro cap = ₹5 lakh; non-metro cap = ₹4 lakh. If HRA is ₹4.5 lakh, metro employee gets higher exemption.
HRA in Old vs New Regime
HRA exemption is available ONLY in the old tax regime. Under the new regime (default from FY 2023-24), you cannot claim HRA exemption even if you pay rent. For most salaried employees with significant rent (₹15,000+/month), the old regime with HRA exemption saves more tax. Use our Income Tax Calculator to compare both regimes.
Pro tips
- Keep rent receipts and rent agreement for ITR
- If rent > ₹1 lakh/year, landlord's PAN is mandatory
- Metro is only Delhi, Mumbai, Kolkata, Chennai — not Bengaluru/Hyderabad
- Paying rent to parents is legal if documented properly
Common use cases
- Salaried employees claiming HRA
- Comparing old vs new tax regime
- Annual tax planning
- Paying rent to parents scenarios
- Deciding whether to buy vs rent
Frequently asked questions
What is HRA exemption?+
HRA exemption is the portion of House Rent Allowance that is tax-free under Section 10(13A) of the Income Tax Act.
How is HRA exemption calculated?+
It's the LEAST of: (1) Actual HRA received, (2) Rent paid − 10% of basic salary, (3) 50% of basic (metro) or 40% (non-metro).
Is HRA available in new tax regime?+
No — HRA exemption is only available in the old tax regime.
What counts as metro city?+
Only Delhi, Mumbai, Kolkata, and Chennai are metros for HRA purposes.
Can I claim HRA if I live with parents?+
Yes — if you pay rent to parents and have a rent agreement. They must declare this as income.
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