HRA Exemption Calculator

House Rent Allowance (HRA) is a common salary component, and under Section 10(13A) of the Income Tax Act, 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 if you live in a metro city (Delhi, Mumbai, Kolkata, Chennai) or 40% if you live elsewhere.

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. 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.