HRA Exemption Calculator – FY 2026-27
Find out how much of your House Rent Allowance is tax-free under the old regime, using the latest 8-city metro rule.
⚙ Rates used – edit them if your official figure is different
HRA exemption is available only under the old regime. In the new regime HRA is fully taxable. Landlord PAN is needed if yearly rent exceeds ₹1 lakh. Not an official tool.
What Is HRA Exemption?
House Rent Allowance, or HRA, is a part of your salary that your employer pays to help with rent. If you pay rent and choose the old tax regime, a portion of HRA can be exempt from tax. The exempt amount is the lowest of three numbers, so your actual saving can be smaller than the HRA shown on your salary slip. This calculator works out the three numbers and shows the exempt and taxable parts.
The Three-Part Formula
| Item | Amount |
|---|---|
| (a) Actual HRA received | From your salary slip |
| (b) Rent paid minus 10% of basic + DA | Yearly rent less one-tenth of basic |
| (c) 50% or 40% of basic + DA | 50% in 8 metro cities, 40% elsewhere |
Whichever is lowest is the exempt HRA. In this formula, “salary” means basic salary plus dearness allowance, not your total CTC.
The New 8-City Metro List
For years only Delhi, Mumbai, Kolkata and Chennai counted as metro cities for HRA. From April 1, 2026, the Income-tax Rules, 2026 add Bengaluru, Hyderabad, Pune and Ahmedabad, so eight cities now use the 50% limit. This applies to FY 2026-27, which you will report in the return filed in 2027. For FY 2025-26, filed in 2026, the older four-city rule still applies. Many people in the four new cities get this wrong, so the calculator has a separate option for them.
Worked Examples
Basic ₹6,00,000, HRA ₹3,00,000, rent ₹3,60,000 in Mumbai
(a) is ₹3,00,000. (b) is ₹3,60,000 minus ₹60,000, which is ₹3,00,000. (c) is 50% of ₹6,00,000, also ₹3,00,000. The exempt HRA is ₹3,00,000 and nothing is taxable.
The same salary in a non-metro city
The third number becomes 40%, which is ₹2,40,000. The exempt HRA falls to ₹2,40,000, and ₹60,000 of HRA becomes taxable.
Basic ₹9,00,000, HRA ₹3,60,000, rent ₹4,80,000 in Bengaluru
(b) is ₹4,80,000 minus ₹90,000, which is ₹3,90,000. (c) is 50% of ₹9,00,000, which is ₹4,50,000. The lowest is (a), so the exempt HRA is ₹3,60,000.
Documents and Rules to Remember
- Keep rent receipts or the rent agreement for your employer.
- If your yearly rent is more than ₹1 lakh, you must give your landlord’s PAN.
- HRA exemption is available only in the old regime. If you pick the new regime, your full HRA is taxable.
- If you live in your own house or pay rent to a parent, ask a tax professional about the correct way to claim.
Is the Old Regime Worth It Because of HRA?
HRA alone rarely justifies the old regime. Because the new regime has a lower rate and a ₹12 lakh rebate limit, you usually need HRA together with 80C, 80D and home loan interest to come out ahead. Use the 13 lakh salary calculator on this site to compare both regimes after you find your HRA figure here.
Quick Checklist Before You Claim
Confirm that your payslip shows HRA as a separate component, that you pay rent for the same city where you work, and that the landlord is not a spouse. Also check that you picked the old regime, because HRA does nothing in the new one. If you are not sure, compare both regimes first, then decide how much effort to spend on rent receipts.
When Your Rent Is Too Low to Matter
The second part of the formula, rent minus 10% of basic, often decides the result. If you pay only ₹15,000 a month and your basic is ₹60,000 a month, the rent less 10% is ₹9,000 a month, which may be below your HRA. Then your exemption is limited by the rent, not by your HRA. People who live with parents and pay a small rent are surprised by this. The calculator shows all three numbers so you can see which one is holding the exemption down.
Changing Jobs or Cities in the Year
If you moved cities during the year, or changed jobs, the calculation must be done month by month for each period. Enter the yearly figures for one period at a time, and add the results. Your employer will usually do this in payroll, but you can check the final figure when you file your return. The city for each month is where you worked, and not where you currently live.
Claiming HRA When You File Your Return
If your employer did not give you the full exemption in payroll, you can still claim it when you file your income tax return, as long as you have rent receipts or a rent agreement and the landlord’s PAN when needed. Keep these papers for several years in case you are asked for them.
Frequently Asked Questions
Is Bengaluru a metro city for HRA?
Yes, from FY 2026-27. It is now in the 50% list along with Hyderabad, Pune and Ahmedabad.
Can I claim HRA in the new regime?
No. HRA exemption is for the old regime only.
Is the HRA exemption based on CTC?
No. It uses basic salary plus dearness allowance.
Is this the official calculator?
No. It is an independent estimate. Confirm with your employer or a Chartered Accountant.