HRA Calculator

CalculatorApp.me

Part of:India Personal Finance Guide 2026: EMI, SIP, FD, GST, Income Tax & Investment Calculators

HRA Calculator

No Intrusive AdsAI-Powered

Calculate your HRA (House Rent Allowance) tax exemption for metro and non-metro cities. Free India HRA exemption calculator with the exact 3-condition formula.

Basic Salary (₹/month)

HRA Received (₹/month)

Rent Paid (₹/month)

City Type

Metro = Mumbai, Delhi, Chennai, Kolkata. All other cities are non-metro.

Enter values above to see results.

HRA Exemption at a Glance

House Rent Allowance tax exemption — old tax regime only (2026)

50%

Of Basic Salary — Metro City Cap

40%

Of Basic Salary — Non-Metro Cap

3

Conditions — Exemption Is the Minimum of All Three

Old

Regime Only — Not Available Under New Regime

What Is HRA Exemption?

House Rent Allowance (HRA) is a salary component many Indian employers pay to cover an employee's rental housing cost. Under the old tax regime, a portion of the HRA received can be claimed as tax-exempt under Section 10(13A) of the Income Tax Act, provided the employee actually pays rent for accommodation they occupy.

The exempt amount is calculated as the minimum of three conditions — actual HRA received, a percentage of basic salary that depends on whether the city is a metro, and rent paid minus 10% of basic salary. Whichever of these three is smallest becomes the tax-exempt portion; the remainder of the HRA received is taxed as normal salary income.

HRA Exemption Formula

Condition 1

Actual HRA Received

The HRA component actually paid by your employer, as shown on your payslip.

Condition 2

50% or 40% of Basic Salary

50% for a metro city (Mumbai, Delhi, Chennai, Kolkata); 40% for all other cities.

Condition 3

Rent Paid − 10% of Basic

Annual rent paid, minus 10% of your basic salary for the same period.

HRA Exemption = MIN(Condition 1, Condition 2, Condition 3). Anything above the exempt amount is added back to your taxable salary income.

Key HRA Rules

Rule	Detail
Metro cities	Mumbai, Delhi, Chennai, and Kolkata qualify for the higher 50% of basic cap; all other cities use 40%
Landlord PAN	Mandatory when annual rent exceeds ₹1,00,000
Rent to parents	Valid — requires a formal rental agreement, rent receipts, and the parent declaring the rental income in their own ITR
New tax regime	HRA exemption is not available — this is one of the main reasons the old regime can still win for renters
HRA + home loan	Claimable together if the rented home is in a different city from the owned property, or with a genuine reason for not occupying the owned property
No rent paid	If you don’t pay rent (e.g., living in your own home), the HRA exemption is not applicable — the entire HRA received is taxable

History & Enforcement of HRA Exemption

1961

Section 10(13A) Enacted

HRA exemption was codified in the original Income Tax Act, 1961, with the computational mechanics (the three-condition minimum) later formalized under Income Tax Rule 2A.

2001

Metro City List Fixed

Mumbai, Delhi, Chennai, and Kolkata were designated the four metro cities eligible for the higher 50%-of-basic exemption cap — a classification that has not changed since.

2020

New Tax Regime Introduced (Optional)

Budget 2020 introduced Section 115BAC as an optional lower-rate regime that explicitly excludes HRA exemption and most other deductions — the first time HRA became conditional on regime choice.

2023

New Regime Becomes Default

The new regime (without HRA exemption) became the default; taxpayers must now actively opt into the old regime to retain HRA benefits.

2024–2025

AI-Based Scrutiny Tightened

The Income Tax Department expanded automated cross-checking of HRA claims against AIS, Form 26AS, and landlord PAN records, sharply raising the detection rate for inflated or fabricated rent receipts.

HRA Myths vs. Facts

Myth

My HRA exemption equals the HRA amount my employer pays me.

Fact

Exemption is the MINIMUM of three separately calculated amounts — actual HRA received is just one of them. It is very often smaller than the actual HRA paid, with the difference taxed as normal salary income.

Myth

I can pay rent to my spouse and claim HRA on it.

Fact

The Income Tax Department does not recognize rent paid to a spouse as a genuine HRA-qualifying arrangement, regardless of documentation, since a married couple is treated as a single household unit for this purpose.

Myth

HRA exemption works the same under both tax regimes.

Fact

HRA exemption under Section 10(13A) is exclusively an old-regime benefit. Under the new regime (now the default), the entire HRA received is taxable regardless of actual rent paid.

Myth

Fake or inflated rent receipts are unlikely to be caught.

Fact

The department cross-checks HRA claims against AIS, Form 26AS, and landlord PAN records using automated data-matching. Penalties for misreporting run 50-200% of the under-reported tax, on top of recovering the tax itself with interest.

Frequently Asked Questions

How is HRA exemption calculated?▼

HRA exemption is the minimum of three amounts: actual HRA received, 50% of basic salary (metro city) or 40% (non-metro), and rent paid minus 10% of basic salary. Whichever is smallest becomes the tax-exempt portion.

What counts as a metro city for HRA?▼

Only Mumbai, Delhi, Chennai, and Kolkata qualify for the higher 50%-of-basic exemption cap. All other Indian cities, including Bangalore, Hyderabad, and Pune, use the 40% non-metro cap.

Is HRA exemption available under the new tax regime?▼

No. HRA exemption under Section 10(13A) is only available under the old tax regime. This is one of the primary reasons metro renters with a meaningful HRA component may still find the old regime advantageous.

Can I claim HRA exemption for rent paid to my parents?▼

Yes, provided you have a formal rental agreement, pay rent through a traceable method, and your parent declares the rental income in their own income tax return. Rent paid to a spouse is not recognized for HRA purposes.

What documents do I need to claim HRA?▼

Rent receipts for the claimed period, a signed rental agreement, and — if annual rent exceeds ₹1 lakh — your landlord’s PAN. Submit these to your employer via Form 12BB or claim directly when filing your ITR.

What if I don’t receive HRA from my employer but I do pay rent?▼

Self-employed individuals or salaried employees not receiving HRA can claim a deduction under Section 80GG instead, capped at the minimum of ₹5,000/month, rent paid minus 10% of total income, or 25% of adjusted gross total income.

What happens if I submit a fake or inflated rent receipt?▼

The Income Tax Department can levy a penalty of 50% of the under-reported tax for a genuine error, rising to 200% for deliberate misreporting, plus recovery of the original tax with interest. Claims are increasingly cross-checked via AI-based data matching against AIS, Form 26AS, and landlord PAN records.

Can I claim both HRA exemption and home loan interest deduction?▼

Yes, if your rented accommodation is in a different city from your owned property, or if you have a genuine reason for not occupying your owned property (e.g. it is under construction or rented out to someone else).

Does owning a house in the same city disqualify me from HRA?▼

Not automatically. You can still claim HRA for a rented property in the same city if you have a genuine reason for not occupying your owned home, but you cannot claim HRA for rent on the same property you own and occupy.

Research & Data Sources

Income Tax Act, 1961 — Section 10(13A) & Rule 2A

The statutory basis for HRA exemption and the exact three-condition minimum formula this calculator applies.

↗ incometax.gov.in

Section 80GG — Deduction for Rent Paid Without HRA

The parallel provision for taxpayers whose salary structure doesn’t include an HRA component, including Form 10BA filing requirements.

↗ cleartax.in

Tax Dept Scrutiny of Rent Claims

Coverage of the Income Tax Department’s tightened AI-based cross-checking of HRA claims, including rules on rent paid to family members.

↗ business-standard.com

HRA Calculator

Free HRA exemption calculator for India. Calculate your tax-free HRA using the exact 3-condition formula for metro and non-metro cities.

Methodology, sources & limitations

This calculator uses a published formula and the values entered in the calculator to generate the result.

Formula: Exemption = MIN(HRA received, 50%/40% of basic, Rent paid − 10% of basic)
Jurisdiction & units: Intended for US, IN, EU, GB, AU, CA. Supports both units where applicable.
Assumptions & limitations: Results use the inputs you provide and published formulas or rate assumptions. They are estimates, not financial, tax, lending, or investment advice.
Review status: Formula and automated QA completed July 21, 2026; independent professional review is pending. Next scheduled review: October 21, 2026.

Validation sources

Income Tax Act, 1961 — Section 10(13A) and Rule 2A
Income Tax Department of India

HRA Calculator — Answer & Method

Calculate HRA (House Rent Allowance) tax exemption for metro and non-metro Indian cities under the old tax regime.

Formula: HRA Exemption

Exemption = MIN(HRA received, 50%/40% of basic, Rent paid − 10% of basic)

Basic = Basic Salary (INR)

Example Calculation

Basic ₹6L/year, HRA ₹2.4L, rent ₹2.64L, metro city: exemption = min(₹2.4L, ₹3L, ₹2.04L) = ₹2.04 lakh.

Important limitation

This is an estimate based on your inputs, not financial, lending, tax, or investment advice.

Key Facts

HRA exemption is the minimum of three conditions: actual HRA received, 50%/40% of basic salary, or rent paid minus 10% of basic.
Only Mumbai, Delhi, Chennai, and Kolkata qualify as metro cities for the higher 50% cap; all others use 40%.
HRA exemption is not available under the new tax regime.

Sources & Validation

Income Tax Act, 1961 — Section 10(13A) and Rule 2AIncome Tax Department of India

Related Calculators

India Income Tax Calculator PPF Calculator Home Loan Calculator

Deterministic: YesAI-Generated Numbers: NoVerified: 2026-02-12

HRA Calculator

Related Articles

HRA Exemption: How to Calculate It (Metro vs Non-Metro)

New vs Old Tax Regime India FY 2025-26

HRA Exemption at a Glance

What Is HRA Exemption?

HRA Exemption Formula

Condition 1

Condition 2

Condition 3

Key HRA Rules

History & Enforcement of HRA Exemption

Section 10(13A) Enacted

Metro City List Fixed

New Tax Regime Introduced (Optional)

New Regime Becomes Default

AI-Based Scrutiny Tightened

HRA Myths vs. Facts

Frequently Asked Questions

Research & Data Sources

Income Tax Act, 1961 — Section 10(13A) & Rule 2A

Section 80GG — Deduction for Rent Paid Without HRA

Tax Dept Scrutiny of Rent Claims

Related Calculators

HRA Calculator

Methodology, sources & limitations

Validation sources

HRA Calculator — Answer & Method

Formula: HRA Exemption

Example Calculation

Important limitation

Key Facts

Sources & Validation

Related Calculators

Related Articles

HRA Exemption: How to Calculate It (Metro vs Non-Metro)

New vs Old Tax Regime India FY 2025-26

HRA Calculator

Related Articles

HRA Exemption: How to Calculate It (Metro vs Non-Metro)

New vs Old Tax Regime India FY 2025-26

HRA Exemption at a Glance

What Is HRA Exemption?

HRA Exemption Formula

Condition 1

Condition 2

Condition 3

Key HRA Rules

History & Enforcement of HRA Exemption

Section 10(13A) Enacted

Metro City List Fixed

New Tax Regime Introduced (Optional)

New Regime Becomes Default

AI-Based Scrutiny Tightened

HRA Myths vs. Facts

Frequently Asked Questions

Research & Data Sources

Income Tax Act, 1961 — Section 10(13A) & Rule 2A

Section 80GG — Deduction for Rent Paid Without HRA

Tax Dept Scrutiny of Rent Claims

Related Calculators