Calculate your House Rent Allowance tax exemption under Section 10(13A), see your taxable HRA, and estimate your tax savings under the Old Regime for FY 2026-27.
Enter your monthly or annual salary components
Annual: ₹6,00,000
Annual: ₹2,40,000
Annual: ₹2,16,000
Used to compute your actual take-home tax savings from the HRA exemption.
HRA exemption under Section 10(13A) is valid under the Old Tax Regime only. Under the New Tax Regime, all HRA received is fully taxable.
Total Exempt HRA
Equivalent to ₹13,000 per month
Taxable HRA
₹84,000
₹7,000/mo added to income
Est. Tax Saved
₹32,448
₹2,704/mo saved at 20% slab
The 3 Calculation Limits (Rule 2A)
Lowest is exempt₹2,40,000
₹3,00,000
₹1,56,000
(₹2,16,000 − ₹60,000)House Rent Allowance (HRA) is one of the most valuable salary components for salaried taxpayers in India who live in rented accommodation. Governed by Section 10(13A) and Rule 2A of the Income Tax Act, HRA is not automatically 100% tax-free. Your exemption is calculated as the lowest of three specific statutory limits. This calculator applies all three rules instantly, identifies the capping rule, and computes your net tax-free allowance, taxable HRA, and actual tax savings.
Under Section 10(13A) read with Rule 2A of the Income Tax Rules, your exempt HRA is strictly the least (minimum) of the following three statutory amounts:
The total House Rent Allowance paid to you by your employer for the financial year.
50% of basic salary for 4 metros (Delhi, Mumbai, Kolkata, Chennai); 40% for all other cities.
Actual rent paid minus 10% of your eligible salary (basic + qualifying DA).
Statutory Exemption Formula
Exempt HRA = Minimum(Actual HRA, 50% / 40% of Basic, Rent Paid − 10% of Basic)
Taxable HRA = Actual HRA Received − Exempt HRA (Added to gross salary)
Suppose an employee lives in Delhi (Metro) and earns an annual basic salary of ₹6,00,000, receives ₹2,40,000 as annual HRA, and pays ₹18,000/month (₹2,16,000/year) in rent:
| Statutory Condition | Calculation Details | Computed Amount |
|---|---|---|
| 1. Actual HRA received | ₹20,000 × 12 months | ₹2,40,000 |
| 2. 50% of Basic Salary (Metro) | 50% of ₹6,00,000 | ₹3,00,000 |
| 3. Rent Paid − 10% of Basic | ₹2,16,000 − ₹60,000 (10% of ₹6L) | ₹1,56,000 (Lowest) |
| Exempt HRA (Tax-Free under Section 10(13A)) | ₹1,56,000 | |
| Taxable HRA (₹2,40,000 − ₹1,56,000 added to salary) | ₹84,000 | |
| Tax Saved (Assuming 20% slab + 4% cess = 20.8%) | ₹32,448 | |
The most important rule in recent tax years: HRA exemption is ONLY available under the Old Tax Regime. Under the New Tax Regime (Section 115BAC), no HRA exemption is allowed; your entire HRA is fully taxable.
💡 Rule of thumb: If your total deductions (HRA + 80C + 80D + home loan interest) exceed ₹3.75 Lakhs to ₹4.25 Lakhs (depending on income), the Old Regime usually saves more tax. Compare both regimes with our Income Tax Calculator or read our Tax Regime Break-Even Guide.
To claim HRA through your employer’s payroll (via Form 12BB) or directly while filing your Income Tax Return (ITR-1 or ITR-2), keep the following records ready:
Monthly or quarterly rent receipts containing landlord name, address, rent amount, and tenant details. Revenue stamp required if cash payment exceeds ₹5,000.
Mandatory under CBDT circular if annual rent exceeds ₹1,00,000 (i.e. ₹8,333/month). If landlord has no PAN, a signed declaration in Form 60 must be collected.
A valid registered or notarized lease agreement stating the monthly rent, security deposit, tenancy period, and landlord and tenant terms.
Bank statements showing regular electronic fund transfers (NEFT, RTGS, IMPS, or UPI) to your landlord. Provides unshakeable proof in case of tax scrutiny.
Yes, absolutely. You can pay rent to your parents and claim HRA tax exemption provided: (1) your parents legally own the house (you cannot be a co-owner), (2) you actually transfer rent to their bank account every month, and (3) your parents declare this rental income in their personal income tax returns under Income from House Property. Caution: You cannot pay rent to your spouse, as husband and wife are legally viewed as living together.
Yes. If you own a home (e.g. in Pune or your hometown) on which you are paying home loan EMIs, but live in a rented accommodation in another city (e.g. Mumbai) due to employment, you can claim both: Section 10(13A) HRA exemption on rent paid, AND Section 24(b) home loan interest deduction (up to ₹2 Lakhs) + Section 80C principal repayment deduction.
For HRA calculations under Rule 2A, “Salary” means Basic Salary + Dearness Allowance (DA) that forms part of retirement benefits, plus commission if it is based on a fixed percentage of turnover. Special allowances, bonus, medical allowance, and conveyance do not count as salary for HRA calculation.
Under Section 10(13A) and Rule 2A of the Income Tax Act, HRA exemption is the least (minimum) of three statutory amounts: (1) Actual HRA received from your employer, (2) 50% of Basic Salary + DA for metro cities (40% for non-metro cities), and (3) Rent paid minus 10% of Basic Salary + DA. Whichever is lowest is 100% tax-free; the rest of your HRA is added to taxable salary.
For income tax HRA calculation, only four cities are legally classified as metros: Delhi (NCR), Mumbai, Kolkata, and Chennai. For these four cities, the limit is 50% of basic salary. All other cities across India (including major IT hubs like Bengaluru, Hyderabad, Pune, Gurugram, Noida, and Ahmedabad) are categorized as Non-Metro, where the 40% limit applies.
No. The HRA exemption under Section 10(13A) is exclusively available under the Old Tax Regime. If you opt for the New Tax Regime (Section 115BAC), your entire HRA is fully taxable. However, the new regime offers lower slab rates and a higher standard deduction of ₹75,000 for salaried employees.
Under CBDT circulars, if your total rent paid exceeds ₹1,00,000 per year (which works out to ₹8,334 per month), submitting your landlord's PAN to your employer via Form 12BB is legally mandatory. If the landlord does not possess a PAN card, you must obtain a signed declaration in Form 60 from the landlord along with their ID proof.
If your annual rent paid is less than or equal to 10% of your basic salary, Rule 3 (Rent Paid − 10% of Basic) becomes zero or negative. Because the exemption is the minimum of the three rules floored at zero, your exempt HRA becomes ₹0. In this case, your entire HRA allowance is taxable.
Yes, you can pay rent to your parents and claim HRA, provided the arrangement is genuine. Your parents must be the legal owners of the residential property, rent should be transferred via bank account (NEFT, UPI, or cheque), and your parents must declare this rental income under 'Income from House Property' in their income tax return. You cannot pay rent to your spouse.
Yes. If you own a house purchased with a home loan but live in a rented home because your workplace is in another city (or the owned home is under construction or rented out), you can claim both: HRA exemption under Section 10(13A) for rent paid, and home loan interest deduction up to ₹2 Lakhs under Section 24(b) plus principal repayment under Section 80C.
Yes. If you missed submitting rent receipts or Form 12BB to your employer before the payroll cutoff date, TDS will be deducted from your salary. However, you can still claim the eligible HRA exemption under Section 10(13A) directly while filing your Income Tax Return (ITR-1 or ITR-2) and claim a refund for the excess TDS deducted.
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