HRA Exemption Calculator
Calculate your tax-free HRA under the three-condition rule for metro and non-metro cities.
HRA calculator finds the tax-free portion of your House Rent Allowance under Section 10(13A) of the Income Tax Act. Enter your monthly Basic+DA, HRA received, and rent paid. Select metro or non-metro city. Results appear instantly. The tool shows all three conditions and highlights which one limits your exemption.
City type
Metro: Delhi, Mumbai, Kolkata, Chennai (50% of Basic+DA applies)
HRA Exempt (annual)
₹1,56,000
65% of total HRA
HRA Taxable (annual)
₹84,000
added to gross salary
Three-Condition Rule — least of
The highlighted row is the limiting condition
HRA exemption is governed by Section 10(13A) of the Income Tax Act. Consult a tax advisor for your specific situation.
Frequently Asked Questions
- How is HRA exemption calculated?
- HRA exemption is the least of three annual figures. First: actual HRA received. Second: 50% of Basic+DA for metro cities, or 40% for non-metro. Third: rent paid minus 10% of Basic+DA. Whichever is smallest becomes the exempt amount. Any HRA above that limit is taxable.
- What qualifies as a metro city for HRA exemption?
- Only four cities qualify as metro for HRA: Delhi, Mumbai, Kolkata, and Chennai. All other cities, including Bengaluru, Hyderabad, Pune, and Ahmedabad, are non-metro. Metro employees use 50% of Basic+DA as the ceiling. Non-metro employees use 40%.
- Can I claim HRA if I pay rent to my parents?
- Yes. Rent paid to parents is valid for HRA exemption, but the arrangement must be genuine. Your parents should declare the rent as income in their tax return. A rent agreement is advisable. Rent paid to a spouse is not accepted by the income tax department.
- What if my rent is less than 10% of my basic salary?
- When rent paid is below 10% of Basic+DA, the third condition becomes zero. Since exemption is the least of three amounts, it collapses to zero. No HRA exemption applies. Rent must exceed 10% of Basic+DA to qualify for any benefit.
- Is the entire HRA exempt from income tax?
- Not automatically. HRA becomes fully exempt only when the three-condition formula permits it, typically when rent paid is high relative to salary. Employees living in their own house or paying no rent cannot claim HRA exemption. The full HRA component then becomes taxable salary.
- What documents do I need to claim HRA exemption?
- Submit rent receipts to your employer for monthly rent up to ₹3,000. For rent above ₹8,333 per month (₹1 lakh annually), provide the landlord's PAN. A signed rent agreement is recommended in all cases. Keep records for the full financial year.
- Can I claim HRA and home loan deduction together?
- Yes, under specific conditions. Owning a house in one city while renting in another for work qualifies for both benefits. HRA exemption applies to the rented city. Home loan interest under Section 24(b) applies to the owned house. Both cannot be claimed for the same property.
What is HRA Exemption Calculator?
HRA exemption calculator finds the tax-free portion of House Rent Allowance under Section 10(13A) of the Income Tax Act. HRA is a salary component paid by employers to help cover rental costs. Not all of it escapes tax. The exempt amount depends on three conditions specified by the IT Act, and the smallest of the three applies.
The calculator evaluates all three conditions and highlights which one is restricting your benefit.
How does it work?
The exemption is the minimum of three annual amounts. First: actual HRA received from the employer. Second: 50% of Basic+DA for metro city employees, or 40% for non-metro. Third: rent paid minus 10% of Basic+DA.
When any condition produces zero or a negative number, the entire exemption drops to zero. The third condition does this when rent paid is below 10% of Basic+DA. The shortfall wipes out the benefit.
DA stands for Dearness Allowance. It counts alongside basic salary in this formula. HRA itself, special allowances, bonus, and overtime are all excluded from the base.
HRA Exemption in India
India's HRA rules have remained structurally unchanged since 1974. The four-city metro classification still lists only Delhi, Mumbai, Kolkata, and Chennai. Bengaluru, Hyderabad, and Pune are non-metro despite surpassing Chennai in population. Parliament has not updated the classification to reflect urban growth.
For rent above ₹1 lakh per year (roughly ₹8,334 per month), the landlord's PAN is mandatory. Submit it when filing HRA documents with your employer. Without PAN, the employer deducts TDS on the full HRA amount. Rent paid to parents must be shown as rental income in their tax return. Rent to a spouse is rejected by the income tax department.
Self-employed individuals cannot claim HRA exemption under Section 10(13A). A separate deduction under Section 80GG covers rent for those without an HRA component in their pay.
Tips to get the best results
- Enter only Basic+DA in the first field. The IT Act formula uses Basic+DA as the base, not gross salary or CTC. Including other allowances overstates your exemption.
- If your salary slip shows Basic and DA separately, add them before entering. Some companies merge them into one line; others show them separately.
- The tool works on monthly inputs and shows annual results. For mid-year salary changes, run calculations for each period separately and add the exempt amounts.
- If condition 3 is the limiting factor, paying higher rent raises your exemption directly. The benefit grows until it hits the lower of conditions 1 and 2.
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