Planning calculator
HRA Exemption Calculator
House rent allowance is only partly tax-free, and the exempt portion is the smallest of three separate tests. Most failed claims come down to the second one — and to not knowing which cities count as metros.
Your numbers
Not your full salary — only basic pay and dearness allowance.
The HRA line on your payslip.
Rent above ₹1,00,000 a year needs your landlord's PAN.
For this section, metro means Delhi, Mumbai, Kolkata or Chennai only. Bengaluru, Hyderabad and Pune take the 40% limit.
HRA exempt from tax
Old regime only₹2,64,000
Of ₹2,88,000 received as HRA over 12 months, ₹2,64,000 is exempt and ₹24,000 is added to taxable salary.
- HRA received
- ₹2,88,000
- Taxable HRA
- ₹24,000
- Exempt share
- 92%
The three tests — the smallest one wins
Section 10(13A) grants the least of these three amounts. Nothing else matters.
- HRA actually received₹2,88,000
- Rent paid over 10% of salaryApplies₹2,64,000
- 50% of salary (metro)₹3,60,000
Exempt against taxable
The share of your HRA that survives the three tests.
Your annual figures
Everything scaled to the months you paid rent.
- Salary (basic + DA) × 12
- ₹7,20,000
- HRA received
- ₹2,88,000
- Rent paid
- ₹3,36,000
- 10% of salary
- ₹72,000
- 50% of salary
- ₹3,60,000
- Exempt under 10(13A)
- ₹2,64,000
The arithmetic
How this calculator works
No proprietary model, no adjustment factor we will not name. This is the standard formula, applied exactly as written.
Exemption = the LEAST of:
1. HRA actually received
2. Rent paid − 10% of salary
3. 50% of salary (Delhi, Mumbai, Kolkata, Chennai)
40% of salary (everywhere else)
Salary = basic pay + dearness allowance- Test 1
- You can never exempt more HRA than you were paid
- Test 2
- Rent above a tenth of salary — the usual binding constraint
- Test 3
- A ceiling based on where you rent
- Salary
- Basic + DA only, never your full CTC
- For this section, metro means Delhi, Mumbai, Kolkata and Chennai only. Bengaluru, Hyderabad, Pune and Gurugram all take the 40% limit, however expensive their rents.
- The exemption is available under the old tax regime only. It has no effect at all under the new regime.
- If your annual rent exceeds ₹1,00,000 you must report your landlord's PAN to your employer.
Worked example
The same maths, on real numbers
Basic plus DA of ₹60,000 a month, HRA of ₹24,000 a month, rent of ₹28,000 a month, in Mumbai, for a full year.
| Basic + DA | ₹7,20,000 / year |
|---|---|
| HRA received | ₹2,88,000 / year |
| Rent paid | ₹3,36,000 / year |
| Test 1 — HRA received | ₹2,88,000 |
| Test 2 — rent over 10% | ₹2,64,000 |
| Test 3 — 50% of salary | ₹3,60,000 |
| Exempt (the least) | ₹2,64,000 |
Test 2 binds, as it does for most people, leaving ₹24,000 of the HRA taxable. Notice how sensitive this is to rent: paying ₹30,000 instead of ₹28,000 would make the full HRA exempt, while dropping to ₹24,000 would cut the exemption to ₹2,16,000. Notice too what the same numbers would produce in Bengaluru — test 3 falls to ₹2,88,000, which does not bind here, so the answer is unchanged. The metro rule matters far less often than people assume.
What this calculator assumes
- Rent is genuinely paid to a landlord who is not you, and can be evidenced.
- Salary means basic pay plus dearness allowance, as the section requires.
- You occupy the rented property — you cannot claim HRA on a house you own and live in.
- You are filing under the old tax regime.
What it deliberately leaves out
- No exemption is available under the new regime. If you are on the new regime, this figure has no effect on your tax.
- Claiming both HRA and home loan interest is possible but only in specific circumstances, such as a house in a different city. That combination is not modelled here.
- Where salary or rent changed mid-year, the exemption is computed period by period. This calculator uses a single set of figures across the months you enter.
Questions about the hra calculation
No. Section 10(13A) recognises only Delhi, Mumbai, Kolkata and Chennai as metros. Bengaluru, Hyderabad, Pune, Gurugram and Noida all take the 40% limit, regardless of how high rents there have become.
Yes, provided the arrangement is real: they must own the property, you must actually pay the rent, and they must declare it as income in their return. Keep a rent agreement and bank transfers. Cash payments to a family member are the fastest way to lose the claim under scrutiny.
Then section 10(13A) does not apply, but section 80GG might. It allows a deduction for rent paid where you receive no HRA, capped at the least of ₹5,000 a month, 25% of total income, or rent paid over 10% of income. It is also old-regime only.
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