HRA Exemption Calculator FY 2026-27
Find out how much of your House Rent Allowance is tax-free for FY 2026-27 — now with 50% for Bengaluru, Hyderabad, Pune and Ahmedabad too. Old Regime only.
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Advanced optionsTax year, deductions and other settings (sensible defaults already applied)
Only DA that counts for retirement benefits. Leave 0 if you don't get DA (most private jobs).
Your tax-free HRA
Tax-free HRA: ₹1,68,000/year
₹14,000/month · limited by Rent Paid − 10% of (Basic + DA)
Show calculationEvery step, the rule behind it and the official source
1. The three limits
- Salary for HRA = basic₹4,80,000
- 1. HRA actually received₹2,40,000
- 2. Rent paid (₹2,16,000) − 10% of salary (₹48,000)₹1,68,000
- 3. 50% of salary (listed city: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad)₹2,40,000
- Exemption = the lowest of the three₹1,68,000
HRA exemption (earlier Section 10(13A)) · Income Tax Dept: HRA
2. Exempt and taxable HRA
- HRA received₹2,40,000
- Taxable HRA (added to salary)₹72,000
- Exempt HRA (old regime only)₹1,68,000
HRA exemption (earlier Section 10(13A)); not available in the new regime · Income Tax Dept: HRA
Each line is rounded for display, so adding the rounded lines can differ from the total by 1.
What if…Move a slider to see how your tax changes
Full breakdownTables, chart and tax-saving tips
Exemption = Least of the Following Three
| HRA Received | ₹20,000 |
| Exempt HRA | ₹14,000 |
| Taxable HRA (added to salary income) | ₹6,000 |
How HRA Exemption Works
House Rent Allowance (HRA) is a common salary component, and under the HRA exemption (HRA exemption (earlier Section 10(13A))) part of it can be claimed as tax-exempt if you live in rented accommodation — but only under the Old Tax Regime. The New Regime doesn't allow this exemption, so if you've switched to the New Regime, your full HRA is taxable. The exempt amount is the smallest of three figures: the actual HRA you receive, your annual rent minus 10% of your basic salary, and 50% of your basic salary in a listed city or 40% elsewhere. From FY 2026-27 the Income-tax Rules, 2026 extend the 50% list from four cities (Delhi, Mumbai, Kolkata, Chennai) to eight, adding Bengaluru, Hyderabad, Pune and Ahmedabad. For FY 2025-26 returns the original four-city rule still applies.
Why rent minus 10% of basic? The formula assumes you'd spend roughly 10% of your basic salary on housing regardless, so only rent paid above that baseline counts toward the exemption. This is also why someone earning a high basic salary but paying modest rent often finds their exemption capped by the "rent minus 10%" rule rather than the city-based percentage. Here "salary" means basic pay plus any Dearness Allowance that counts toward retirement benefits — common in government and PSU jobs — so enter your DA above if you receive it. If you pay rent exceeding ₹1,00,000 in a year, you'll also need your landlord's PAN to claim the exemption.
Note: This calculator assumes Basic Salary as defined here includes Dearness Allowance (DA) if applicable, per the standard formula. It does not verify landlord PAN requirements or rent receipts — keep documentation ready for your employer or during ITR filing.
HRA only helps under the Old Regime, so confirm it beats the New Regime with the tax regime calculator, then see your monthly pay in the salary calculator.
Estimates for FY 2026-27 (Tax Year 2026-27) (Old Regime only). The 50% cities for this year are Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad. Not a substitute for professional tax advice.
How the HRA exemption calculator works
House rent allowance is taxable unless you live in a rented home and claim the exemption in the old regime. The tax-free part is the lowest of three limits, and the calculator works out all three for FY 2026-27.
- 1
Find your salary for HRA
For HRA, “salary” means basic pay plus any dearness allowance that counts for retirement benefits. Bonus, HRA itself and other allowances are left out.
- 2
Work out the three limits
The calculator compares (1) the HRA you actually receive, (2) the rent you pay minus 10% of salary, and (3) 50% of salary if you live in one of the eight listed cities (Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad) or 40% anywhere else.
- 3
Take the lowest as tax-free
The lowest of the three is exempt; the rest of your HRA is added to taxable salary. The result also tells you which limit applied, so you can see what would raise the exemption.
- 4
Monthly or yearly
Enter monthly or yearly figures; the calculator converts them. If your rent, salary or city changed during the year, work out each period separately and add them up.
Worked example: same salary, two cities
Basic ₹50,000 a month, HRA ₹25,000 a month and rent ₹30,000 a month. One employee lives in Bengaluru, which joined the 50% list from FY 2026-27; the other lives in a city on the 40% list.
| Bengaluru (50%) | Other city (40%) | |
|---|---|---|
| HRA received | ₹3,00,000 | ₹3,00,000 |
| Rent − 10% of salary | ₹3,00,000 | ₹3,00,000 |
| 50% / 40% of salary | ₹3,00,000 | ₹2,40,000 |
| Taxable HRA | ₹0 | ₹60,000 |
| Tax-free HRA | ₹3,00,000 | ₹2,40,000 |
In Bengaluru the whole ₹3,00,000 is tax-free; in the 40% city only ₹2,40,000 is, because 40% of salary becomes the lowest limit. That ₹60,000 difference is taxed at your slab rate in the old regime.
Who should use this calculator
- Salaried employees who pay rent and are using, or thinking about, the old tax regime.
- Anyone in Bengaluru, Hyderabad, Pune or Ahmedabad, where the limit rose from 40% to 50% in FY 2026-27.
- People comparing regimes who need the exact HRA figure to enter in the old vs new regime calculator.
- Employees planning rent or salary structure, for example asking whether a higher HRA component would help.
What this calculator doesn't cover
- The new regime: HRA is fully taxable there, so the exemption only matters if you choose the old regime.
- Documents. It assumes you have rent receipts and an agreement, and your landlord's PAN when yearly rent is above ₹1 lakh.
- Changes during the year. It applies one rent, salary and city to the whole period you enter.
- Rent deductions for people whose salary has no HRA component.
- The 8-city list follows the Income-tax Rules, 2026 as reported by KPMG; we are confirming it against the official Rules text.
Read next
- HRA exemption rules and calculation guideWho can claim, the three limits, documents and special cases.
- Old vs new regime calculatorSee whether your HRA exemption makes the old regime cheaper.
- CTC to in-hand salary calculatorYour monthly take-home with HRA as part of salary.
- Old vs new tax regime: complete guideBreak-even deductions at each salary.
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FAQ
Frequently asked questions
How is HRA exemption calculated?
The tax-free part of HRA is the lowest of three amounts: the HRA you actually receive, rent paid minus 10% of salary, and 50% of salary in a metro city or 40% elsewhere. Salary here means basic pay plus dearness allowance that counts for retirement benefits.
Can I claim HRA exemption in the new tax regime?
No. The HRA exemption (earlier Section 10(13A)) is available only in the old tax regime. In the new regime your entire HRA is taxable.
Which cities count as metro for HRA?
From FY 2026-27 (Income-tax Rules, 2026), eight cities get the 50% limit: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. For FY 2025-26 returns only the original four (Delhi, Mumbai, Kolkata, Chennai) qualify. Everywhere else uses 40%.
Do I need my landlord's PAN to claim HRA?
Yes, if the rent you pay is more than ₹1 lakh in the year, you must give your employer the landlord's PAN. Keep rent receipts and the rental agreement as proof.
Can I claim HRA if I pay rent to my parents?
Yes, if you genuinely pay rent to a parent who owns the house and they show it as income in their return. You cannot claim HRA for rent paid to your spouse.
What if my salary doesn't include HRA?
Under the old regime you may claim a deduction for rent paid (Section 80GG under the 1961 Act), up to ₹5,000 a month, subject to conditions such as not owning a home where you live.
How much HRA is tax-free on ₹40,000 basic and ₹18,000 rent?
In a metro city, with ₹20,000 HRA received a month, the exemption is the lowest of ₹20,000 (HRA received), ₹14,000 (rent minus 10% of basic) and ₹20,000 (50% of basic): ₹14,000 a month, or ₹1,68,000 a year. The other ₹72,000 of HRA is taxable.
Keep calculating
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