HRA Exemption Calculator
FY 2026-27 — Calculate your tax-free House Rent Allowance instantly
HRA exemption is available only under the Old Tax Regime (Section 10(13A)). It is not claimable under the New Tax Regime.
Your Details
Metro: 50% of basic applies. Non-Metro: 40% of basic applies.
HRA Composition
Monthly HRA Exemption
₹13,000
= Minimum of the 3 conditions below
Taxable HRA
₹7,000
per month
Annual Exemption
₹1.56 L
saved from tax
How the Exemption is Calculated
HRA exemption = minimum of the following 3 conditions
Actual HRA received
As received from employer
₹20,000
50% of Basic Salary
50% × ₹50,000 (Metro)
₹25,000
Rent paid minus 10% of Basic
₹18,000 − 10% × ₹50,000 = ₹18,000 − ₹5,000
₹13,000
Lowest — usedAnnual HRA Summary (FY 2026-27)
| Description | Monthly | Annual |
|---|---|---|
| Basic Salary | ₹50,000 | ₹6.00 L |
| Total HRA Received | ₹20,000 | ₹2.40 L |
| Rent Paid | ₹18,000 | ₹2.16 L |
| HRA Exemption (Tax-Free) | ₹13,000 | ₹1.56 L |
| Taxable HRA | ₹7,000 | ₹84,000 |
* Annual figures assume the same monthly amounts throughout FY 2026-27. If your salary or rent changes during the year, calculate each period separately.
About HRA Exemption in India
House Rent Allowance (HRA) is a component of your salary paid by the employer to cover accommodation expenses. Under Section 10(13A) of the Income Tax Act read with Rule 2A, the portion of HRA used to pay rent is exempt from tax — provided you are a salaried individual living in rented accommodation.
The exemption is calculated as the minimum of three conditions: (1) the actual HRA received from your employer; (2) 50% of basic salary for employees in metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metro employees; and (3) actual rent paid minus 10% of basic salary. This minimum-of-three rule ensures the exemption is conservative and tied to actual rental expenditure.
To claim HRA exemption, you must actually pay rent — you cannot claim it if you own the house you live in, or if you live rent-free. If your annual rent exceeds ₹1 lakh, your landlord's PAN must be submitted to your employer. Maintain rent receipts (physical or digital) for each month as documentary evidence; these may be required during assessment.
Importantly, HRA exemption is only available under the Old Tax Regime. Under the New Tax Regime (default from FY 2023-24), HRA is fully taxable but you benefit from lower slab rates and a higher standard deduction of ₹75,000. If your HRA exemption is large relative to the tax saving from lower slabs, staying in the Old Regime is typically better. Use the Income Tax Calculator on this site to compare.
One frequently overlooked fact: you can claim HRA exemption and home loan deductions simultaneously if you are paying rent in the city where you work but have a home loan on a property in another city. This is completely legal and commonly used.
Frequently Asked Questions
Who can claim HRA exemption under the Income Tax Act?
Only salaried employees who receive HRA as part of their CTC and are paying rent for their accommodation can claim HRA exemption under Section 10(13A) read with Rule 2A. Self-employed individuals cannot claim HRA exemption; however, they can claim rent paid as a deduction under Section 80GG (subject to conditions). You cannot claim HRA exemption if you own the house you are living in or if you are not actually paying rent.
What is the 10% of basic salary rule in HRA calculation?
The third condition for HRA exemption is: Rent paid minus 10% of basic salary (and Dearness Allowance, if any). This clause prevents employees from claiming exemption when they pay only a nominal rent. For example, if your basic is ₹50,000/month and you pay ₹5,000 rent, Condition 3 = ₹5,000 − ₹5,000 = ₹0 — meaning zero HRA is exempt. You need to pay rent exceeding 10% of basic to get any exemption at all.
What documents do I need to claim HRA exemption?
If your annual rent exceeds ₹1 lakh (i.e., more than ₹8,333/month), you must submit your landlord's PAN to your employer. For all HRA claims, you should maintain: (1) rent receipts for each month, (2) the rent agreement, (3) if rent exceeds ₹1L/year — landlord's PAN card copy, and (4) if paying to a family member — additional evidence that the arrangement is genuine (bank transfer records). Your employer deducts TDS based on the HRA exemption you declare; documents should be submitted at year-end or on request.
Can I claim both HRA exemption and home loan deduction simultaneously?
Yes, this is legally permissible in certain scenarios. If you own a house (say in your hometown) and are paying a home loan on it, but are working in a different city and paying rent, you can claim both the home loan interest deduction (Section 24b) and HRA exemption for the rent you pay. The exemption is only disallowed if you own and occupy the same house for which you claim HRA. Many employees in metro cities with parents' homes in other cities use this legitimately.
Is HRA available under the New Tax Regime?
No. HRA exemption under Section 10(13A) is not available under the New Tax Regime (introduced in FY 2020-21 and made the default from FY 2023-24). Under the new regime, all salary income including HRA is fully taxable, but you get lower slab rates and a standard deduction of ₹75,000. If your HRA exemption is significant (typically if rent is above ₹20,000–₹25,000/month), the Old Tax Regime often remains more beneficial. Use the Income Tax Calculator on this site to compare both regimes.