HRA Exemption Calculator

About the HRA Exemption Calculator

House rent allowance (HRA) in your salary is partly tax-free under the old regime when you pay rent for the home you live in. The exempt part is the least of three amounts: the HRA you receive, the rent you pay minus 10% of your salary, and 50% or 40% of your salary depending on the city. Salary here means basic pay plus dearness allowance.

This calculator works it out for Tax Year 2026-27 under rule 279 of the Income-tax Rules, 2026 — which gives the 50% limit to eight cities: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad — or for FY 2025-26, when only the four metros got 50%. Enter the same figures for every month, or month by month when your rent, pay or city changed. If your salary has no HRA, it works out the rent deduction instead.

The three amounts

For each period you live in one rented home, the exempt HRA is the least of:

• HRA received for the period;
• rent paid minus one-tenth of salary for the period;
• 50% of salary if the home is in one of the listed cities, otherwise 40%.

“Salary” is basic pay plus dearness allowance when your terms of employment provide for it — no other allowances or perquisites (rule 279(2)). The rest of the HRA is taxable. The exemption needs a home you do not own and rent you actually pay (Schedule III, Table Sl. No. 11 of the Income-tax Act, 2025). For FY 2025-26 the same method applies under section 10(13A) and rule 2A.

Which cities get the 50% limit?

Tax Year 2026-27: Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru — the table in rule 279(1)(c) of the Income-tax Rules, 2026. Every other place gets 40%.

FY 2025-26: only Mumbai, Kolkata, Delhi and Chennai; the Income Tax Department’s own ITR-1 utility for that year says to choose “Metro” only for these four.

The rule names cities, not regions. Places next to them — such as Gurugram, Noida, Navi Mumbai or Thane — are not in the list, so as the rule is written they get the 40% limit.

Rent deduction when your salary has no HRA

If you pay rent but receive no HRA — many self-employed people and some employees — the old regime gives a deduction of the least of: rent paid minus 10% of total income, ₹5,000 for each month, and 25% of total income (section 134 of the Income-tax Act, 2025; section 80GG for FY 2025-26). Total income is before this deduction. For FY 2025-26 the department applies the 25% test to total income without long-term capital gains and section 111A short-term gains.

You cannot claim it if you, your spouse or your minor child own a home where you live or work, or if you own a home elsewhere that you treat as self-occupied (section 134(4)). Claim it with Form No. 31 (rule 65 of the Income-tax Rules, 2026), or Form 10BA for FY 2025-26.

Proof for your employer

Employers deduct TDS on the basis of the HRA exemption you claim, so they ask for rent receipts. For Tax Year 2026-27, rule 205 of the Income-tax Rules, 2026 asks for the landlord’s name, address and PAN in Form No. 124 when your rent for the year is more than ₹1 lakh, and your relationship with the landlord, if any. For FY 2025-26 the declaration was Form 12BB. The rent receipt generator makes monthly receipts.

Limitations

• Old regime only: the new regime gives no HRA exemption (section 202(2)(a)(i)).
• Periods are worked out in whole months; a move in the middle of a month is counted from the month you mark.
• Commission is not counted as salary. Rule 279 counts basic pay and DA (where your terms provide for it); if your employer also counts a commission based on a fixed percentage of turnover, add it to basic pay.
• HRA or salary arrears for earlier years, and the rules for government accommodation, are not covered.
• The tax-saved figure is an estimate at a single slab rate plus 4% cess; use the income tax calculator for your actual tax.

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