HRA Exemption Calculator

What this calculator does

If you are a salaried employee in India paying rent, part of the House Rent Allowance in your salary can be tax-free. Only part, though, and only if you meet the conditions. This calculator works out how much of your HRA escapes tax and how much is still taxable.

You enter your basic pay, your dearness allowance, the HRA you receive, and the rent you pay, and tick whether you live in a metro city. It returns your exempted HRA, the portion you do not pay tax on, and your taxable HRA, the portion you do. The exemption is not simply the HRA you receive, and it is not the rent you pay. It is decided by a specific rule, which is what the next section is about.

How to use it

1. Basic pay. Your annual basic salary.
2. Dearness allowance. Your annual DA. Enter 0 if it does not apply to you.
3. HRA received. The House Rent Allowance your employer paid you over the year.
4. Actual rent paid. The total rent you paid for the year.
5. Metro city. Tick this if you live in a metro city, which changes one part of the calculation.

Press Calculate for your exempted and taxable HRA, or Reset to clear the fields.

The least-of-three rule

Here is the heart of it. Under Section 10(13A) of the Income Tax Act, read with Rule 2A, your HRA exemption is not a single formula. It is the smallest of three separate amounts, and the law takes whichever comes out lowest:

1. The actual HRA your employer gave you.
2. The rent you paid, minus 10 percent of your salary.
3. 50 percent of your salary if you live in a metro city, or 40 percent if you do not.

One term needs pinning down: "salary" here means your basic pay plus your dearness allowance, not your whole package. The calculator works out all three amounts from your inputs, picks the lowest as your exemption, and whatever HRA is left over after that becomes taxable. Because it is always the lowest of the three, the exemption is often capped by the rent figure, which is why paying little or no rent leaves you with little or no exemption, no matter how much HRA you receive.

A worked example you can check

Say your basic pay is 500,000 a year, your DA is 100,000, you receive HRA of 250,000, you pay rent of 240,000, and you live in a metro city. Let us run the three amounts.

• Salary for this purpose: 500,000 + 100,000 = 600,000
• Actual HRA received: 250,000
• Rent paid minus 10 percent of salary: 240,000 − 60,000 = 180,000
• 50 percent of salary, since it is a metro: 300,000

The lowest of 250,000, 180,000, and 300,000 is 180,000, so that is your exempted HRA. The rest, 250,000 − 180,000 = 70,000, is taxable. Notice the rent figure is what pinned the exemption down here. If you had paid more rent, the exemption would have risen, up to the point where one of the other two amounts became the lowest instead.

This applies under the old tax regime

This is the part to get right before you rely on the number, because it decides whether the exemption exists for you at all. The HRA exemption is available only under the old tax regime. Under the new tax regime, which is now the default in India, HRA exemption is not allowed, and the entire HRA you receive is taxable.

So this calculator is telling you what you could exempt if you are on the old regime. If you have opted for the new regime, the exemption does not apply, and the tax-free figure here would not be available to you. Which regime saves you more depends on your whole salary and your other deductions, and HRA is often one of the biggest reasons people stay on the old regime in the first place. It is worth working that comparison out before you choose.

What counts as a metro city

The metro tick matters because it sets that third amount at 50 percent of salary instead of 40 percent, a meaningful difference. For HRA, "metro" is a specific classification, not just any large city. The four cities long treated as metros for this purpose are Delhi, Mumbai, Kolkata, and Chennai, which use the 50 percent figure. Every other city has traditionally been treated as non-metro at 40 percent.

Because this classification is set by the tax rules and has been the subject of proposed changes over time, it is worth confirming your city's current status before you file, especially if you live somewhere large that is not one of the four. What matters is the city where you actually live and pay rent, not where your office is.

Questions people ask

Can I pay rent to my parents and claim HRA?

Yes, if they own the home, you genuinely pay the rent, ideally by bank transfer, and they declare it as rental income in their own return. It has to be a real arrangement, not one on paper only.

I receive HRA but live in my own house. Can I claim it?

No. The exemption depends on actually paying rent for a home you live in. With no rent paid, there is nothing to exempt, and the full HRA is taxable.

What does "salary" mean in this calculation?

Basic pay plus dearness allowance. It is not your full CTC or gross salary, which is why the exemption is usually smaller than people first expect.

My employer does not pay HRA. Can I still get relief on rent?

Not through this Section 10(13A) exemption, which needs HRA in your salary. A separate provision may help in some cases, but it is a different calculation from this one.

References

The exemption follows Section 10(13A) of the Income Tax Act read with Rule 2A, under which the exempt HRA is the least of the three amounts described above, with salary taken as basic pay plus dearness allowance, as set out by the Income Tax Department of India.

1. Income Tax Department, Government of India, Schedule 10(13A), House Rent Allowance. https://www.incometaxindia.gov.in/w/schedule_10_13a