Tax
HRA Exemption Calculator
Tax-free part of your house rent allowance under the old regime, with the 8-city 50% list from FY 2026-27.
Updated: FY 2026-27, old regime
Result
Updates as you typeExempt HRA a month
₹13,000
- Taxable HRA a month
- ₹7,000
- Exempt HRA a year
- ₹1,56,000
- HRA received
- ₹20,000
- Rent − 10% of salary
- ₹13,000
- 50% of salary
- ₹25,000
How it's calculated
House rent allowance is partly tax-free if you pay rent for the home you live in and choose the old tax regime. The exempt part is the lowest of three limits; whatever HRA is left over is added to your taxable salary. Salary in this rule is basic pay plus dearness allowance, not your gross or CTC. From FY 2026-27 the higher 50% limit covers 8 cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad.
Worked example
Basic + DA ₹50,000, HRA ₹20,000 and rent ₹18,000 a month, living in Bengaluru:
- (a) HRA received: ₹20,000
- (b) ₹18,000 − 10% × ₹50,000 = ₹13,000
- (c) 50% × ₹50,000 = ₹25,000
- Exempt: ₹13,000 a month (₹1,56,000 a year); taxable ₹7,000 a month
The same figures in a city outside the list give ₹13,000 exempt, because (c) falls to ₹20,000.
Exempt HRA by rent
| Rent a month | 8 cities (50%) | Elsewhere (40%) |
|---|---|---|
| Rent a month: ₹10,000 | 8 cities (50%)₹5,000 | Elsewhere (40%)₹5,000 |
| Rent a month: ₹15,000 | 8 cities (50%)₹10,000 | Elsewhere (40%)₹10,000 |
| Rent a month: ₹20,000 | 8 cities (50%)₹15,000 | Elsewhere (40%)₹15,000 |
| Rent a month: ₹25,000 | 8 cities (50%)₹20,000 | Elsewhere (40%)₹20,000 |
| Rent a month: ₹30,000 | 8 cities (50%)₹20,000 | Elsewhere (40%)₹20,000 |
Frequently asked questions
How is the HRA exemption calculated?
The exempt part is the lowest of three amounts: the HRA you actually receive, the rent you pay minus 10% of your salary, and 50% of salary in the eight listed cities or 40% anywhere else. Salary here means basic pay plus dearness allowance (and any commission fixed as a percentage of turnover), not your gross pay. The rest of the HRA is taxable.
Which cities get the 50% limit from FY 2026-27?
Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad. Rule 279 of the Income-tax Rules, 2026 added Bengaluru, Hyderabad, Pune and Ahmedabad to the four older metros from 1 April 2026. Every other city and town uses 40%. What counts is where you live and pay rent, not where your employer is registered.
Can I claim HRA under the new tax regime?
No. The HRA exemption is available only if you choose the old regime. Under the new regime the whole allowance is taxed, which is why HRA is often the deciding factor between the two. Compare both in the income tax calculator.
What if I don't pay rent or live in my own house?
Then rent minus 10% of salary is zero, so nothing is exempt and the full HRA is taxable. Rent paid to a parent can qualify if it is genuinely paid and the parent shows it as income; rent paid to a spouse is generally not accepted.
What proof does my employer need?
Rent receipts or a rent agreement, and, for larger rents, the landlord's PAN. Without proof, your employer will tax the full HRA through TDS and you can still claim the exemption when you file your return under the old regime. Example: basic + DA ₹50,000, HRA ₹20,000, rent ₹18,000 a month in a listed city gives ₹13,000 exempt and ₹7,000 taxable each month.
Sources
Assumes the same salary, HRA and rent every month of the year; part-year rent, changes of city or salary and employer-specific rules are not applied. Results are for guidance only.