HRA Calculator
If you live in rented accommodation and get HRA from your employer, part or all of it can be exempt from tax. The exemption is the lowest of three amounts, which this calculator shows side by side.
Results
HRA exemption
₹1,80,000
- Taxable HRA
- ₹1,20,000
- Exemption per month
- ₹15,000
- (a) HRA received
- ₹3,00,000
- (b) Rent − 10% of salary
- ₹1,80,000
- (c) 50% or 40% of salary
- ₹3,00,000
The HRA exemption is ₹1,80,000 (the lowest of the three limits, which is rent paid minus 10% of salary), leaving ₹1,20,000 of HRA taxable.
Show the calculation steps
- (a) HRA received = ₹25,000 × 12 = ₹3,00,000.
- (b) Rent paid − 10% of salary = ₹2,40,000 − ₹60,000 = ₹1,80,000.
- (c) 50% of salary (metro city) = ₹3,00,000.
- Exemption = the lowest of (a), (b) and (c) = ₹1,80,000; taxable HRA = ₹1,20,000.
- Salary here means basic salary plus dearness allowance (if it forms part of retirement benefits) and commission on a fixed percentage of turnover.
- The HRA exemption is available only under the old tax regime. Metro cities in the rules are Delhi, Mumbai, Kolkata and Chennai; check for updates.
The three limits
The exempt amount cannot exceed the HRA you receive, the rent you pay above 10% of your salary, or a fixed share of salary (50% in metro cities and 40% elsewhere). The lowest of these is your exemption.
Who can claim it
The HRA exemption is available under the old tax regime for salaried employees who pay rent. You usually need rent receipts, and your landlord's PAN if annual rent exceeds ₹1 lakh.
Formula
Exemption = the least of:
(a) HRA actually received
(b) Rent paid − 10% of salary
(c) 50% of salary (metro) or 40% of salary (non-metro)
Where:
- Salary
- = Basic salary + dearness allowance (if part of retirement benefits)
Example calculation
₹50,000 basic, ₹25,000 HRA, ₹20,000 rent in a metro
Inputs
- Monthly Basic Salary (+ DA)
- ₹50,000
- HRA Received per Month
- ₹25,000
- Rent Paid per Month
- ₹20,000
- City
- Metro (50% of salary)
- Months Rent Paid
- 12 months
Result
- HRA exemption
- ₹1,80,000
- Taxable HRA
- ₹1,20,000
- Exemption per month
- ₹15,000
- (a) HRA received
- ₹3,00,000
- (b) Rent − 10% of salary
- ₹1,80,000
- (c) 50% or 40% of salary
- ₹3,00,000
Step-by-step
- (a) HRA received = ₹25,000 × 12 = ₹3,00,000.
- (b) Rent paid − 10% of salary = ₹2,40,000 − ₹60,000 = ₹1,80,000.
- (c) 50% of salary (metro city) = ₹3,00,000.
- Exemption = the lowest of (a), (b) and (c) = ₹1,80,000; taxable HRA = ₹1,20,000.
Important notes
- The HRA exemption is not available under the new tax regime. The list of metro cities in the rules may change; check the current definition.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
How is HRA exemption calculated?
It is the lowest of HRA received, rent paid minus 10% of salary, and 50% (metro) or 40% (non-metro) of salary.
Can I claim HRA if I live with my parents?
You can if you actually pay rent to them and they show it as income. Keep proof of payment.
Is HRA available in the new tax regime?
No. It is an old-regime benefit.
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