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HRA Tax Exemption Calculator

Last verified: 24 Sept 2026

Statutory baseline: Income Tax Department (CBDT) · Section 10(13A) & Rule 2A.

₹

Your annual basic pay + dearness allowance

₹

Total HRA component provided by employer per year

₹

Actual rent paid across the entire financial year

Select metro for Delhi/NCR, Mumbai, Kolkata, Chennai

Results

Exempt HRA Amount
₹1,20,000
Taxable HRA Amount₹1,20,000
Rule 1: Actual HRA Received₹2,40,000
Rule 2: Rent Paid − 10% Basic₹1,20,000
Rule 3: Statutory Basic Cap₹3,00,000

Jurisdiction: India (INR locked). HRA exemption is claimable under the Old Tax Regime only.

How HRA exemption is computed

Under Section 10(13A) read with Rule 2A of the Income-tax Rules, 1962, 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 in the financial 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 (Delhi, Mumbai, Kolkata, Chennai) OR 40% (All Other Cities)

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:

Annual Basic Salary (+ DA):₹6,00,000
Annual HRA Received from Employer:₹2,40,000
Actual Rent Paid (₹15,000 × 12):₹1,80,000
Evaluating the Three Statutory Limits:
1. Actual HRA received:₹2,40,000
2. Rent Paid − 10% of Basic (₹1,80,000 − ₹60,000):₹1,20,000
3. 50% of Basic Salary (Mumbai Metro):₹3,00,000
Statutory Tax Exemption (Lowest of 1, 2, and 3):₹1,20,000
Taxable HRA Added to Gross Income (₹2,40,000 − ₹1,20,000):₹1,20,000

Statutory city classification & compliance guidelines

The 4 Metro Cities Rule

Under Rule 2A, only New Delhi, Mumbai, Kolkata, and Chennai qualify for the 50% basic salary ceiling. Major tech hubs such as Bengaluru, Hyderabad, Pune, Gurugram, and Noida legally fall under the 40% non-metro category.

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 Section 24(b) home loan interest deduction (up to ₹2 Lakh) and Section 10(13A) HRA exemption simultaneously.

Remember: HRA exemptions are only available under the Old Tax RegimeUnsure whether your HRA exemption makes the Old Regime better than the New Regime? Read our comprehensive analysis: Old vs. New Tax Regime After Budget 2024: The Exact Breakeven Deduction Formula to check your exact salary bracket and breakeven point.

Frequently asked questions

Which cities qualify for 50% basic salary HRA exemption?
Under Indian income tax rules (Rule 2A), only four metropolitan cities qualify for the 50% ceiling: New Delhi, Mumbai, Kolkata, and Chennai. All other cities, including major IT hubs like Bengaluru, Hyderabad, and Pune, fall under the 40% non-metro category.
Is landlord PAN mandatory to claim HRA tax exemption?
Yes, per CBDT circulars, if annual rent paid exceeds ₹1,00,000 (more than ₹8,333 per month), it is mandatory to provide your landlord's Permanent Account Number (PAN) or declaration to your employer.
Can I claim HRA exemption under the New Tax Regime?
No. HRA exemption under Section 10(13A) is available only under the Old Tax Regime. The default New Tax Regime (Section 115BAC) disallows HRA exemptions in exchange for lower personal income tax slab rates.
Can I pay rent to my parents and claim HRA exemption?
Yes, you can claim HRA by paying rent to parents provided the property is owned by them, rent is paid through regular banking channels, rent receipts are maintained, and your parents declare this rental income in their respective Income Tax Returns.
How is HRA exemption calculated if I own a house in another city?
You can simultaneously claim both HRA exemption and home loan deductions (Section 24(b) and Section 80C) if your owned home is situated in a different city or you live in rented accommodation due to employment constraints.

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Estimated HRA Exemption

₹1,20,000