HRA exemption calculator
If you live in a rented home and get house rent allowance, part of it is tax-free in the old regime. Enter your basic pay, HRA and rent to see how much.
Rules for FY 2026-27 · Checked 24 October 2026
₹15,000 a month. The other ₹60,000 of your HRA is taxed. Old regime only.
- This saves about ₹56.2k of tax a year in the 30% slab, or ₹37.4k in the 20% slab.
- Your rent sets the limit: paying more rent would raise the exemption.
- Tax-free HRA₹1,80,000
- Taxed HRA₹60,000
The exemption is the smallest of these three
- HRA you received
- ₹2,40,000
- Rent paid less 10% of basic
- ₹1,80,000
- 50% of basic
- ₹3,00,000
Paying more than ₹1 lakh rent in a year? Your employer will ask for the landlord's PAN. Under the 2026 rules you also state how you are related to the landlord.
The HRA formula
The tax-free part of your HRA is the smallest of these three amounts for the year:
- The HRA you actually received.
- The rent you paid minus 10% of your basic salary (and DA).
- 50% of basic salary if you live in one of the 8 big cities, or 40% anywhere else.
Whatever HRA is left over is added to your taxable salary.
Which cities get 50% from April 2026
The Income-tax Rules, 2026 added four cities to the 50% list. The 8 cities are now Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad. Every other place, including Noida, Gurugram and Thane, is at 40%.
Rules to keep in mind
- HRA exemption is available only in the old regime. In the new regime all HRA is taxed.
- If your rent is more than ₹1 lakh a year, give your employer the landlord’s PAN.
- You can pay rent to your parents and claim HRA if they own the house and declare the rent as income. You cannot pay rent to your spouse.
- If you get no HRA at all, self-employed people and some employees can claim a smaller deduction for rent instead.
Frequently asked questions
Is Bengaluru a metro city for HRA?
Yes, from FY 2026-27. The Income-tax Rules, 2026 put Bengaluru, Hyderabad, Pune and Ahmedabad in the 50% list with Mumbai, Delhi, Kolkata and Chennai.
Can I claim HRA in the new tax regime?
No. HRA exemption is one of the deductions you give up in the new regime.
Can I claim HRA and home loan benefits together?
Yes, if you live in a rented home and own a house elsewhere, for example in another city, or if the home you own is let out.
What counts as salary for the HRA formula?
Basic pay plus dearness allowance (if it counts for retirement benefits) plus any commission fixed as a percentage of sales. Other allowances do not count.
Sources: Income Tax Department