How much HRA is tax-free?

The least of three amounts: the HRA you received, 50% of salary in Delhi, Mumbai, Kolkata or Chennai (40% elsewhere), and rent paid less 10% of salary. There is no fixed figure — it depends on all three, and which one is smallest determines whether paying more rent would help.

What counts as salary for HRA?

Basic pay plus dearness allowance, plus commission fixed as a percentage of turnover where that applies. It is not CTC, not gross salary and not take-home. Using CTC here would substantially overstate the exemption through limit two.

Can I claim HRA under the new tax regime?

No. HRA exemption is not available under the new regime, which is a significant part of what the wider slabs are trading against. If your exempt HRA is large, work out both regimes before choosing — the regime comparison calculator does the rest of that arithmetic.

Which cities count as metros for the 50% share?

Rule 2A names Delhi, Mumbai, Kolkata and Chennai. Some commentary reports Bengaluru, Pune, Hyderabad and Ahmedabad being added from April 2026, but that was not confirmed against a government source, so the classification is offered as a choice here rather than decided for you.

Do I need proof of the rent I paid?

Yes. Rent receipts are required, and the landlord's PAN must be reported once annual rent crosses the prescribed threshold. Paying rent to a family member is permitted but must be genuine, with an actual transfer of money and the recipient declaring it as income.

Can I claim HRA and home loan interest together?

In some circumstances, yes — for instance if you own a property in one city and rent in another for work. The rules are specific and depend on where the property is, whether it is let out and where you are employed. This calculator handles the HRA side only.

Taxation · FINANCIAL TOOLS

HRA Exemption Calculator

Work out how much of your house rent allowance is exempt, and which of the three statutory limits is holding it down.

Understand the calculation

Calculation logic, formula, example and guardrails behind the estimate.

How it works

Three amounts are computed and the least of them is your exemption: the HRA you actually received, the applicable share of salary, and rent paid less 10% of salary. The rest of the allowance is added to your taxable income.

The table names the binding limit, which is the actionable part. If limit three binds, every extra rupee of rent raises your exemption by a rupee. If limit one or two binds, extra rent does nothing for your tax at all — a distinction worth knowing before negotiating either a salary structure or a lease.

More detail

Salary here means basic plus dearness allowance, not CTC. Because HRA is typically set as a percentage of basic, a salary structure with a low basic caps the exemption through limits one and two simultaneously.

The calculator also reports the rent at which the exemption would reach its ceiling, so you can see how much headroom is left.

To fold this exemption into the regime decision, use the regime comparison calculator.

To see what the taxable part costs you, see the income tax calculator.

To weigh renting against buying altogether, try the rent versus buy calculator.

Formula

Exempt = min(HRA received, 50% or 40% of salary, Rent − 10% of salary)

Floored at zero: where rent is below 10% of salary the third term is negative, and there is no exemption rather than a negative one. Strictly the rule is applied month by month, so a mid-year change in salary, HRA or rent makes the annual shortcut approximate.

Salary: Basic pay plus dearness allowance, and turnover-based commission where it applies.
HRA received: The allowance component of your pay.
Rent: Rent actually paid during the year.

Worked example

A ₹6,00,000 salary (basic plus DA) with ₹2,40,000 of HRA, paying ₹3,00,000 of rent in Mumbai.

01Limit 1 — HRA received₹2,40,000
02Limit 2 — 50% of salary₹3,00,000
03Limit 3 — rent less 10% of salary₹3,00,000 − ₹60,000 = ₹2,40,000
04Exemption — the least of the three₹2,40,000
05HRA still taxable₹0

Limits one and three tie at ₹2,40,000, so the whole allowance is exempt. Paying more rent would achieve nothing further, because limit one caps the exemption at the allowance received. Had the rent been ₹1,80,000 instead, limit three would have fallen to ₹1,20,000 and half the allowance would have become taxable.

Important considerations

01
Know which limit binds before you act
This is the whole value of the calculation. Where the rent limit binds, additional rent converts directly into exemption. Where the allowance or salary share binds, additional rent is simply additional expense with no tax benefit. Most advice on HRA skips this and leaves people paying rent for a deduction they have already maxed out.
02
A low basic caps the exemption twice over
Both limit one and limit two scale with basic pay — the allowance because it is usually set as a share of basic, and the salary share directly. A structure that keeps basic at 30% of CTC therefore restricts the exemption far more than the same total pay with a 50% basic. This is worth raising if your employer offers any flexibility.
03
HRA is the main reason to stay on the old regime
The new regime has wider bands but exempts no HRA. For someone in an expensive city with a substantial allowance, the exemption alone can exceed the new regime's advantage. The regime comparison calculator omits HRA deliberately and says so, so add your exempt figure here to the deductions there to get the honest comparison.

Limitations

The rule is applied month by month in law. A mid-year salary revision, a change of city or a move to a different rent makes this annual computation an approximation.
No tax is computed here. The taxable HRA is added to your income and taxed at your slab rate, which the income tax calculator will handle.
The new tax regime does not exempt HRA at all, so this calculation is only relevant if you are on the old regime.
Whether four further cities were reclassified as metros from April 2026 is reported by some commentary but was not confirmed against a primary source, so the classification is left as your choice rather than inferred from a city name.

Frequently asked questions

Common questions about the hra exemption calculator and the assumptions behind it.

Next useful checks

Move from this result to the next decision without hunting through the full calculator list.

Old vs New Tax Regime CalculatorCompare regimes before relying on one tax estimate.Capital Gains Tax CalculatorEstimate special-rate tax outside salary slabs.

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Disclaimer

This calculator is provided for general information and planning only. It is not investment, tax or legal advice, and it does not take your personal circumstances into account. Outputs are estimates based on the assumptions stated on this page, exclude taxes and charges unless said otherwise, and market-linked returns are not guaranteed — the value of investments can fall as well as rise. Lending terms, rates and eligibility are decided by the lender. For advice on your own situation, speak to a qualified professional, several of whom you can consult on Finvestalk.