HRA Exemption Calculator
Find how much of your House Rent Allowance is tax-free under section 10(13A) / Rule 2A (2025: Rule 279). The exemption is the least of three limits, and only under the old regime.
Switch calculator — current: HRA exemption
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Still needed: basic salary + DA, HRA received, rent paid.
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For guidance only — not tax advice. Every figure is drawn from BharatX’s verified rule book, with the sections and rules shown alongside it.
HRA exemption: how it works and FAQs
FY 2025-26 (Income-tax Act 1961) and FY 2026-27 (Income-tax Act 2025) · Updated
Law behind this calculator
How it works
Tax-free HRA is the lowest of three amounts: the HRA you receive, rent paid minus 10% of salary, and 50% of salary in a metro city or 40% elsewhere.
Tax-free HRA is the lowest of three amounts: the HRA you receive, rent paid minus 10% of salary, and 50% of salary in a metro city or 40% elsewhere. Salary here means basic pay plus DA, plus any commission fixed as a percentage of turnover. The exemption applies only in the old regime, under section 10(13A) and Rule 2A, or Rule 279 for FY 2026-27.
- Salary for HRA is basic pay plus dearness allowance (DA), plus any commission fixed as a percentage of turnover.
- Limit (a) is the HRA you actually receive.
- Limit (b) is rent paid minus 10% of salary, and it is nil when rent is 10% of salary or less.
- Limit (c) is 50% of salary for rent in a metro city and 40% elsewhere; the metros are Delhi, Mumbai, Kolkata and Chennai for FY 2025-26, joined by Hyderabad, Pune, Ahmedabad and Bengaluru for FY 2026-27.
- The lowest limit is exempt under section 10(13A) and Rule 2A, or for FY 2026-27 under Schedule III, Sl. 11 (via section 11) and Rule 279, and the rest of the HRA is taxable.
- Under the new regime, section 115BAC (section 202 of the 2025 Act), no exemption applies and the whole HRA is taxable.
Worked example
₹2,64,000 of Priya's HRA is tax-free and ₹1,20,000 is taxable.
Priya rents a flat in Bengaluru and has opted for the old regime for FY 2026-27. Her basic pay plus DA is ₹9,60,000 a year; she receives ₹3,84,000 of HRA, pays ₹3,60,000 in rent and earns no commission.
- Salary for HRA: ₹9,60,000 (basic pay plus DA).
- Limit (a), HRA received: ₹3,84,000.
- Limit (b), rent minus 10% of salary: ₹3,60,000 − ₹96,000 = ₹2,64,000.
- Limit (c), 50% of salary, as Bengaluru is a metro for FY 2026-27: ₹4,80,000.
- Exempt: the lowest, limit (b), ₹2,64,000; taxable: ₹3,84,000 − ₹2,64,000 = ₹1,20,000.
₹2,64,000 of Priya's HRA is tax-free and ₹1,20,000 is taxable.
Frequently asked questions
Is HRA exempt under the new tax regime?
No. The HRA exemption is not available under the new regime (section 115BAC, or section 202 of the Income-tax Act 2025), so all the HRA you receive is taxable.
Which cities count as metro for HRA in FY 2026-27?
Eight cities: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru, under Rule 279. For FY 2025-26 only Delhi, Mumbai, Kolkata and Chennai count, under Rule 2A. Rent in a metro gets the 50% of salary limit; any other city gets 40%.
What salary is used to calculate HRA exemption?
Basic pay plus dearness allowance (DA), plus any commission fixed as a percentage of turnover. Both the rent-minus-10% limit and the 50% or 40% limit use this figure.
Can I claim HRA exemption if I don't pay rent?
No. With no rent paid, the rent-minus-10%-of-salary limit is nil, so none of the HRA is exempt. The same applies when your rent is 10% of your salary or less.
When do I need my landlord's PAN for HRA?
When the rent you pay is above ₹1,00,000 a year. You then give your landlord's PAN to your employer, as the CBDT circular on salary TDS under section 192 requires.
Every figure the calculator shows lists the sections it relies on under “Legal basis”. For guidance only — not tax advice.