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HRA exemption calculator

Enter your basic pay, the HRA you get and the rent you pay, then pick your city and the tax year. The calculator applies the three limits and shows how much of your HRA is tax-free under the old tax regime, including the eight-city rule that started on 1 April 2026.

Tax year

From 1 April 2026, Bengaluru, Hyderabad, Pune and Ahmedabad get the 50% limit too.

Only DA that counts for retirement benefits.

HRA exemption₹2,40,000.00Tax-free HRA a year in Mumbai
HRA receivedLimit 1. Lowest, so this is the exemption₹2,40,000.00
Rent paid − 10% of salaryLimit 2: ₹3,00,000.00 − ₹60,000.00₹2,40,000.00
50% of salaryLimit 3: 50% in Mumbai₹3,00,000.00
HRA exempt₹20,000.00 a month₹2,40,000.00
Taxable HRAAdded to your taxable salary₹0.00

Rent is above ₹1,00,000 a year, so your employer needs your landlord’s PAN. From tax year 2026-27, under the Income-tax Act 2025 and Income-tax Rules 2026. Old tax regime only: the new regime has no HRA exemption. Salary here is basic + DA.

Make a rent receipt

How to use the HRA calculator

  1. Pick the tax year and the city where you rent.
  2. Enter your monthly basic pay, and DA if it counts for retirement benefits.
  3. Enter the HRA you receive and the rent you pay each month.
  4. Read the exempt HRA, the taxable HRA and which limit decided it.

The HRA exemption formula, worked through

Exempt HRA = the least of (1) HRA received, (2) rent paid − 10% of salary, and (3) 50% of salary in the eight listed cities or 40% elsewhere, all for the months you paid rent. Salary means basic + DA (forming part of retirement benefits) + commission at a fixed share of turnover.

Example: ₹60,000 basic, ₹30,000 HRA and ₹35,000 rent a month in Bengaluru. For the year: HRA ₹3,60,000; rent − 10% of salary = ₹4,20,000 − ₹72,000 = ₹3,48,000; 50% of salary = ₹3,60,000. The exemption is ₹3,48,000 and ₹12,000 is taxable. In FY 2025-26, Bengaluru took the 40% limit, so the exemption was ₹2,88,000.

City and yearHRA receivedRent − 10% of salary50% or 40% of salaryExempt
Mumbai, 2026-27 (₹50,000 basic, ₹20,000 HRA, ₹25,000 rent)₹2,40,000₹2,40,000₹3,00,000 (50%)₹2,40,000
Bengaluru, 2026-27 (₹60,000 basic, ₹30,000 HRA, ₹35,000 rent)₹3,60,000₹3,48,000₹3,60,000 (50%)₹3,48,000
Bengaluru, 2025-26 (same pay and rent)₹3,60,000₹3,48,000₹2,88,000 (40%)₹2,88,000
Another city, 2026-27 (same pay and rent)₹3,60,000₹3,48,000₹2,88,000 (40%)₹2,88,000

What changed for tax year 2026-27

The Income-tax Act 2025 replaced the Income-tax Act 1961 from 1 April 2026. The HRA exemption carried over: it moved from section 10(13A) to Schedule III of the new Act, with the calculation in the Income-tax Rules 2026. The formula is unchanged, but the 50% limit now covers Bengaluru, Hyderabad, Pune and Ahmedabad as well as Mumbai, Delhi, Kolkata and Chennai.

Returns for FY 2025-26 still follow the 1961 Act and its four-city list; choose 2025-26 in the calculator for those.

Making the claim

  • Declare your rent to your employer at the start of the year so less tax is deducted from salary, and send rent receipts when asked.
  • Keep the rent agreement and pay by bank transfer where you can.
  • Give the landlord’s PAN when rent is above ₹1,00,000 a year.
  • If you missed telling your employer, you can still claim the exemption in your income tax return under the old regime.

Questions

How is HRA exemption calculated?

The exempt amount is the least of three: the HRA you actually received, rent paid minus 10% of salary, and 50% of salary in the listed cities or 40% elsewhere. With ₹50,000 basic, ₹20,000 HRA and ₹25,000 rent in Mumbai, the yearly limits are ₹2,40,000, ₹2,40,000 and ₹3,00,000, so ₹2,40,000 is exempt.

Which cities get the 50% limit?

From tax year 2026-27 (starting 1 April 2026), eight: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad, under the Income-tax Rules 2026. Up to FY 2025-26 only the first four qualified. Suburbs and neighbouring cities, such as Gurugram, Noida or Thane, take the 40% limit.

Can I claim HRA under the new tax regime?

No. The HRA exemption is only available under the old tax regime. Under the new regime the whole HRA is taxable, in exchange for lower slab rates. Work out your tax both ways before you choose.

What counts as salary for HRA?

Basic pay, plus dearness allowance if it counts for retirement benefits, plus any commission fixed as a percentage of sales. Other allowances, including HRA itself, are left out.

Do I need my landlord’s PAN?

Yes, if the rent you pay is more than ₹1,00,000 a year. Give your employer the landlord’s name, address and PAN with your rent receipts or rent agreement.

Can I claim HRA if I pay rent to my parents?

Generally yes, if the rent is actually paid, ideally by bank transfer, and your parent shows it as income in their tax return. Rent paid to a spouse is generally not accepted.

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