Last reviewed: — Meta title and description now cite section 11 and Schedule III of the Income-tax Act, 2025.
HRA Exemption Calculator: Tax Year 2026-27
Use this HRA calculator to work out how much of your house rent allowance is exempt from tax under Schedule III (Table Sl. No. 11) of the Income-tax Act, 2025 [old section 10(13A)] and how much stays taxable. FY 2025-26 stays under the Income-tax Act, 1961, where only four cities got the 50% limit.
Statutory baseline: Income-tax Rules, 2026, rule 279 · Income-tax Act, 2025, section 11 & Schedule III (Table Sl. No. 11).
Input Error
Your annual basic pay + dearness allowance
Total HRA component provided by employer per year
Actual rent paid across the entire financial year
Rule 279 lists eight cities at 50% from tax year 2026-27
Results
Jurisdiction: India (INR locked). HRA exemption is not available under the default new regime (section 202).
For information only. Not tax advice. Verify with a Chartered Accountant before filing.
How HRA exemption is computed
Under section 11 and Schedule III (Table Sl. No. 11) of the Income-tax Act, 2025, read with rule 279 of the Income-tax Rules, 2026, the tax-exempt portion of House Rent Allowance is the least of the following three statutory limits:
Limit 1: Actual HRA Received
Total HRA paid by employer for the period you rented in the tax year
Limit 2: Rent Paid in Excess of 10% of Salary
Actual Rent Paid − (10% × [Basic Salary + Dearness Allowance])
Limit 3: Statutory Percentage Ceiling
50% of Basic Salary (Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad, Bengaluru) OR 40% (any other place)
Step-by-step worked example: Metro resident
Suppose an employee living in a rented apartment in Mumbai receives an annual basic salary of ₹6,00,000, receives an annual HRA of ₹2,40,000 from their employer, and pays ₹15,000/month (₹1,80,000/year) in actual house rent:
Statutory city classification & compliance guidelines
The 8-city rule (tax year 2026-27)
Rule 279 of the Income-tax Rules, 2026 gives the 50% limit to Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru. Other places, including Gurugram and Noida, use 40%. Under old Rule 2A (FY 2025-26 and earlier) only Delhi, Mumbai, Kolkata and Chennai got 50%.
Landlord PAN Mandate
Per CBDT circulars, if annual rent paid exceeds ₹1,00,000 (over ₹8,333/month), submitting your landlord's Permanent Account Number (PAN) or a signed Form 60 declaration to your employer is mandatory.
Paying Rent to Parents
Salaried individuals can claim HRA by paying rent to parents if the parents are legal title owners of the property, rental agreements and bank transfer trails exist, and parents declare the rent under House Property income in their ITR.
Dual Home Loan + HRA Benefits
Taxpayers who own a residential home but live in rented accommodation due to employment in another city can claim both the home loan interest deduction under section 22(1)(b) (up to ₹2 lakh) and the HRA exemption in the same tax year.
Frequently asked questions
Which cities qualify for the 50% HRA limit in tax year 2026-27?
Is landlord PAN mandatory to claim HRA tax exemption?
Can I claim HRA exemption under the New Tax Regime?
Can I pay rent to my parents and claim HRA exemption?
How is HRA exemption calculated if I own a house in another city?
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Regulatory baseline, assumptions & legal safety
Operational boundaries and statutory provenance governing this calculation model.
Key Operational Assumptions
- Taxpayer is a salaried employee who has opted out of the default new regime under section 202 (the HRA exemption is not allowed under it).
- Salary includes dearness allowance if provided for under the terms of employment, but excludes all other allowances and perquisites (rule 279(2)(b)).
- Rule 279 gives 50% of salary for Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru; any other place receives 40%.
- Assumes the employee actually paid rent for residential accommodation they occupied and do not own during the period.
Authoritative Source & Regulatory Baseline
- Authoritative Source
- Income-tax Rules, 2026 — rule 279 (limits for Schedule III, Table Sl. No. 11)(Income Tax Department (CBDT))
- Governing Framework
- Income-tax Act, 2025
- Applicable Period
- TY 2026-27
- Jurisdiction & Verification
- Republic of India • Verified 2026-10-24
Statutory context: From tax year 2026-27 the exempt HRA is the least of (1) actual HRA received, (2) rent paid minus 10% of salary, (3) 50% of salary in Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru, or 40% elsewhere (rule 279). Section 202(2)(a)(i) removes the exemption under the default new regime. FY 2025-26 stays under section 10(13A) and Rule 2A of the 1961 law, where only Delhi, Mumbai, Kolkata and Chennai got 50%.
Model Scope & Specific Limitations
This calculator does not model the following scenarios or provisions:
- The HRA exemption cannot be claimed under the default new regime (section 202(2)(a)(i) of the Income-tax Act, 2025).
- Does not calculate month-by-month variances if rent, salary, or city of residence changed during the tax year.
- Does not verify landlord PAN requirements that employers apply when annual rent exceeds ₹1,00,000.
- Cannot be claimed if the employee lives in their own house or pays no rent.
- Estimated result for educational purposes; check official return instructions for specific claims.
Educational & Legal Disclaimer
This calculator uses the rules and published rates by Income Tax Department (CBDT) for TY 2026-27. Estimated result based on the inputs and assumptions provided.
This calculator uses the rules/data published by the Income Tax Department (CBDT) for tax year 2026-27 (Income-tax Act, 2025 and Income-tax Rules, 2026). Estimated result based on the inputs and assumptions provided. Educational tool only; not legal or filing advice. Check official guidance for your specific situation.
Estimated HRA Exemption
₹1,20,000