HRA Exemption Calculator

HRA Exemption Calculator: Salary, Rent & Tax Exemption

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HRA Calculator FY 2026-27

HRA exemption isn’t a simple percentage – it’s the smallest of three separate numbers, and most people never find out which of the three actually capped their exemption. Enter your salary, HRA, and rent below to see your exact exempt and taxable HRA, and exactly which rule limited it.

From FY 2026-27, eight cities count as metro: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad, and Ahmedabad. Every other city is non-metro.
Exempt HRA (Tax-Free)
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Taxable HRA
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HRA exemption is available only if you choose the old tax regime – the new regime taxes your entire HRA with no exemption at all, regardless of rent paid or city. This calculator assumes constant salary, HRA, and rent through the year; if any of these changed partway through the year, calculate each period separately and add the results together.

Three Numbers, Not One Percentage

People often describe HRA exemption as “40% or 50% of your salary,” but that’s only one of three figures involved, and it isn’t even the one that usually decides your exemption. Under Section 10(13A), your exempt HRA is whichever of these three comes out smallest: the actual HRA your employer pays you, your rent minus 10% of your salary, or the 50%/40% city-based figure. Most salaried employees with a modest rent find that the “rent minus 10% of salary” rule is the real constraint, not the city percentage everyone focuses on.

The 2026 metro list just got bigger. For decades, only Delhi, Mumbai, Kolkata, and Chennai qualified for the higher 50% rate, while every other Indian city – including Bengaluru, Pune, Hyderabad, and Ahmedabad – was stuck at 40% despite their rents rising just as fast. From FY 2026-27, that changed: these four cities now join the original four at the 50% rate, making eight metros in total. If you work in one of these newly added cities, check that your employer’s payroll system has actually been updated to reflect this – some are still running the old four-city list.

Reading Your Result

Enter your monthly Basic salary plus DA, the HRA your employer actually pays you, and the rent you pay, then pick metro or non-metro. The calculator works out all three figures behind the scenes and shows you the smallest one as your exempt amount – open the breakdown table to see exactly which of the three rules was your limiting factor, since that tells you what would actually move the needle if you wanted a bigger exemption next year.

Why This Only Works Under the Old Regime

Section 10(13A) exemption exists only for taxpayers who file under the old tax regime. If you’ve opted for the new regime, your entire HRA gets added to your taxable salary with nothing carved out, no matter how much rent you actually pay or which city you live in. This is one of the biggest factors tenants with high rent should weigh when deciding between the two regimes – a large HRA exemption can be worth more than the new regime’s lower slab rates, depending on your numbers.

Paying Rent to Parents

You can claim HRA exemption on rent paid to your parents, provided it’s genuine – a proper rent agreement exists, the rent is actually paid through a bank transfer rather than sitting only on paper, and your parents declare that rental income in their own tax return. This arrangement is disallowed if you claim to pay rent for a house you jointly own with a parent, since you can’t legally rent from yourself.

What If Your Salary Doesn’t Include HRA?

If you’re self-employed, or your salary structure simply has no HRA component, Section 10(13A) doesn’t apply to you at all. Section 80GG offers a fallback deduction instead, capped at Rs 60,000 a year, calculated as the lowest of Rs 5,000 per month, 25% of your total income, or rent paid minus 10% of your total income. It’s a much smaller benefit than a properly structured HRA, which is one reason salaried employees are usually better off having HRA built into their pay rather than relying on 80GG.

The Paperwork That Actually Matters

If your total annual rent crosses Rs 1 lakh, you must report your landlord’s PAN to your employer to claim the exemption in your TDS calculation – without it, your employer can and often will disallow the exemption at source, even if you’re genuinely entitled to it. If your landlord has no PAN, a signed self-declaration from them is typically accepted instead. Keep your rent receipts and bank transfer records regardless of the amount, since these are what actually get checked if your return is picked up for scrutiny.

Frequently Asked Questions

Q. Is HRA exemption 50% or 40% of my salary? Ans. Neither, by itself – that’s just one of three figures compared. Your actual exempt amount is the smallest of the actual HRA received, your rent minus 10% of salary, or 50% (metro) or 40% (non-metro) of your salary. Many people assume the city percentage is what they’ll get, but if your rent is modest relative to your salary, the “rent minus 10%” rule often produces a smaller, more limiting figure.
Q. Which cities count as metro for the 50% HRA rate in FY 2026-27? Ans. Eight cities now qualify: the original four – Delhi, Mumbai, Kolkata, and Chennai – plus four newly added from FY 2026-27 – Bengaluru, Pune, Hyderabad, and Ahmedabad. Every other city in India, including Gurugram, Noida, and all others not on this list, is treated as non-metro at the 40% rate.
Q. Can I claim HRA exemption under the new tax regime? Ans. No. HRA exemption under Section 10(13A) is available only if you file under the old tax regime. Under the new regime, your full HRA amount is added to your taxable salary with no exemption whatsoever, regardless of your actual rent or city of residence.
Q. Can I claim HRA exemption for rent paid to my parents? Ans. Yes, provided the arrangement is genuine. You need a proper rent agreement, actual rent payment through a bank transfer (not just a paper trail), and your parents must declare that rent as income in their own tax return. This does not work if you’re paying “rent” for a house you jointly own with the parent you’re claiming to pay, since you can’t rent your own property.
Q. What if my salary structure doesn’t include an HRA component? Ans. You cannot claim Section 10(13A) exemption without an HRA component in your salary. Instead, Section 80GG offers a smaller fallback deduction, capped at Rs 60,000 a year, calculated as the lowest of Rs 5,000 per month, 25% of your total income, or rent paid minus 10% of your total income. It applies to both salaried employees without HRA and to self-employed individuals paying rent.
Q. Do I need my landlord’s PAN to claim HRA exemption? Ans. Only if your total rent for the year exceeds Rs 1 lakh. Above that threshold, you must provide your landlord’s PAN to your employer, or the exemption can be disallowed while your employer calculates TDS on your salary. If your landlord doesn’t have a PAN, a signed self-declaration from them is generally accepted as a substitute.
Q. What happens if I change cities or get a raise partway through the year? Ans. HRA exemption is technically meant to be calculated month by month, not as one single annual figure, precisely because your salary, rent, or city classification can change mid-year. If you moved from a non-metro to a metro city in, say, October, you’d apply the 40% rule to the April-to-September period and the 50% rule from October onward, using the specific salary and rent for each period, then add the two exemption amounts together for your annual total.

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