Three limbs, one answer
The exemption is the smallest of HRA received, rent minus 10% of salary, and the city percentage of salary. Whichever limb is lowest decides the whole exemption — the other two do not matter.
Free HRA calculator
HRA Calculator
Enter your basic salary, the HRA you receive and the rent you pay — and get the tax-free HRA per month and per year, the taxable part, and the three limbs with the binding one highlighted.
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₹1,92,000 exempt a year
On ₹40,000 basic a month · Mumbai, FY 2026-27
₹1,08,000 taxable a year
The rest of the ₹3,00,000 HRA is added to taxable salary
₹16,000 exempt a month
The rent limb binds — ₹1,92,000 of ₹3,00,000 HRA is tax-free
A statutory figure at the numbers you enter, not tax advice. This tool applies the HRA exemption under the Income-tax Act — it is not tax advice. The figure is the statutory exemption on the numbers you enter; your Form 16 and your return decide what is actually exempt. Check the rules table below before you rely on it.
Calculate HRA exemption
₹40,000 basic · Mumbai — the worked exampleExample figures are filled in. Replace them with your own numbers.
YOUR ANSWER
WORKING SHOWN BELOW
Your answer
₹1,92,000
EXEMPT HRA / YEAR
₹1,08,000
TAXABLE HRA / YEAR
₹16,000
EXEMPT HRA / MONTH
Your answer at a glance
₹40,000 a month · Mumbai (50%, FY 2026-27) → exempt ₹1,92,000 a year (₹16,000 a month). Taxable ₹1,08,000 a year.
Limbs (per year): (a) HRA received ₹3,00,000; (b) rent minus 10% of salary ₹1,92,000; (c) 50% of salary ₹2,40,000. The smallest is rent minus 10% of salary at ₹1,92,000 a year.
Least of ₹3,00,000, ₹1,92,000 and ₹2,40,000 = ₹1,92,000 a year exempt; ₹1,08,000 a year taxable.
Mumbai — 50% city for FY 2026-27. Old regime — the exemption applies under the old regime. Salary is basic + DA: ₹40,000 a month.
Annual rent ₹2,40,000 — above the ₹1,00,000 line, so your landlord PAN must be reported on Form 12BB.
The figure is the statutory exemption under the Income-tax Act on the numbers you enter. Your Form 16 and your return decide what is actually exempt — and the exemption is available only under the old tax regime.
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The three limbs, side by side
Which limb decides your exemption
The exempt HRA is the smallest of the three — rent minus 10% of salary binds at ₹16,000 a month.
| Limb | Per year | Per month | Binding? |
|---|---|---|---|
| (a) HRA actually received | ₹3,00,000 | ₹25,000 | No |
| (b) Rent paid − 10% of salary | ₹1,92,000 | ₹16,000 | Yes — the binding limb |
| (c) 50% of salary (Mumbai, FY 2026-27) | ₹2,40,000 | ₹20,000 | No |
Understand the result
What does an HRA calculator do?
House rent allowance is the part of your salary your employer pays towards rent. If you pay rent and live in the house, part of that HRA is exempt from income tax — the smallest of three figures: the HRA you actually receive, the rent you pay minus 10% of your salary, and 50% of your salary if you live in a metro city, else 40%. This calculator works out all three limbs, picks the smallest, and splits your HRA into the tax-free and taxable parts, per month and per year.
50% in eight cities from FY 2026-27
Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad get 50% from FY 2026-27. In FY 2025-26 only the first four did. Every other place gets 40% in both years.
No exemption under the new regime
The HRA exemption exists only under the old tax regime. Under the new regime the whole HRA is taxable salary — switch the regime selector to New and the calculator shows ₹0 exempt.
How it works
From your salary and rent to an exempt HRA figure
Enter your basic salary first — the HRA, rent, city, year and regime are already filled in with the usual figures — then read the exempt and taxable HRA.
Enter your basic salary + DA
Basic pay + dearness allowance only, per month — from ₹1,000 to ₹10,00,000. Not your gross salary or CTC; entering those inflates the exemption.
Enter the HRA you receive and the rent you pay
Both per month. The HRA is the allowance on your payslip; the rent is what you actually pay your landlord. Either can be zero.
Pick your city, financial year and tax regime
The city decides whether limb (c) is 50% or 40% — and the 50% list depends on the year: four cities in FY 2025-26, eight from FY 2026-27. The new regime gives no exemption at all.
Read the exempt and taxable HRA
The answer appears as you type — exempt HRA per month and per year, taxable HRA per month and per year, and the three limbs with the binding one highlighted.
The calculation, explained
How HRA exemption is calculated
Exempt HRA = least of (a) HRA actually received, (b) rent paid minus 10% of salary, (c) 50% of salary if the rented house is in a metro city, else 40% of salary. Salary is basic pay + dearness allowance forming part of retirement benefits. The exemption is available only under the old tax regime — under the new regime the whole HRA is taxable.
1. The rent limb binds in Mumbai
1,92,000 a year exempt · 1,08,000 taxable
₹40,000 basic, ₹25,000 HRA, ₹20,000 rent: limbs ₹3,00,000, ₹1,92,000 and ₹2,40,000 a year — the smallest is the rent limb.
2. Bengaluru: ₹60,000 more in FY 2026-27
4,44,000 in FY 2026-27 · 3,84,000 in FY 2025-26
₹80,000 basic, ₹50,000 HRA, ₹45,000 rent in Bengaluru: the 50% limb is ₹4,80,000 from FY 2026-27 but only ₹3,84,000 in FY 2025-26 — and the rent limb binds at ₹4,44,000 in the new year.
3. New regime: the whole HRA is taxable
0 exempt · 3,00,000 taxable a year
The same Mumbai figures under the new regime: no exemption at all, so the full ₹3,00,000 of HRA is added to taxable salary.
The Bengaluru trap: the 50% list grew in FY 2026-27
Bengaluru, Hyderabad, Pune and Ahmedabad were 40% cities in FY 2025-26 and became 50% cities from FY 2026-27. On ₹80,000 basic, ₹50,000 HRA and ₹45,000 rent, the exemption is ₹3,84,000 a year for FY 2025-26 and ₹4,44,000 for FY 2026-27 — a ₹60,000 difference for picking the wrong year. Check the year selector before you file.
Worked examples
Five cases, five HRA figures
One example for each everyday case, including one where the HRA itself is the limit and one under the new regime. Select any example to load it into the calculator and check the working for yourself.
₹40,000 basic in Mumbai: ₹1,92,000 a year tax-free
₹40,000 of basic, ₹25,000 of HRA and ₹20,000 of rent in Mumbai. The three limbs are ₹3,00,000, ₹1,92,000 and ₹2,40,000 a year — the rent limb is the smallest, so ₹1,92,000 is exempt and ₹1,08,000 is taxable.
₹40,000 basic · Mumbai → exempt ₹1,92,000 a year
₹50,000 basic outside a metro: ₹1,56,000 a year tax-free
₹50,000 of basic, ₹20,000 of HRA and ₹18,000 of rent in a non-metro city. The limbs are ₹2,40,000, ₹1,56,000 and ₹2,40,000 a year — again the rent limb binds, so ₹1,56,000 is exempt and ₹84,000 is taxable.
₹50,000 basic · Other city / town → exempt ₹1,56,000 a year
₹60,000 basic in Delhi: the HRA itself is the limit
Only ₹10,000 of HRA a month on a ₹60,000 basic — the HRA received is the smallest limb at ₹1,20,000 a year, so the whole HRA is exempt and nothing is taxable, even though the rent is high.
₹60,000 basic · Delhi → exempt ₹1,20,000 a year
₹80,000 basic in Bengaluru: ₹4,44,000 a year tax-free in FY 2026-27
Bengaluru joined the 50% list from FY 2026-27. The limbs are ₹6,00,000, ₹4,44,000 and ₹4,80,000 a year — the rent limb binds at ₹4,44,000. In FY 2025-26 the same figures gave only ₹3,84,000, because Bengaluru was a 40% city then.
₹80,000 basic · Bengaluru → exempt ₹4,44,000 a year
Same Mumbai figures, new regime: ₹0 exempt
The new tax regime gives no HRA exemption at all. The same ₹40,000 basic, ₹25,000 HRA and ₹20,000 rent that exempt ₹1,92,000 a year under the old regime leaves the full ₹3,00,000 of HRA taxable under the new regime.
₹40,000 basic · Mumbai → exempt ₹0 a year (new regime — ₹0 exempt)
HRA rules at a glance
HRA rules at a glance
The rules that decide how much of your HRA is tax-free: the least-of-three formula, which cities count as metro in each year, the old-regime-only limit, the landlord PAN line and the s.80GG alternative. Every rule here is from the Income-tax Act, the Income-tax Rules or the CBDT notification — never from a blog or a competitor.
| Figure | Rule | What it means |
|---|---|---|
| Least of three | The formula | Exempt HRA = least of (a) HRA actually received, (b) rent paid minus 10% of salary, (c) 50% of salary in a metro city, else 40%. Salary is basic pay + dearness allowance forming part of retirement benefits (plus commission as a percentage of turnover). |
| 50% — 8 cities | FY 2026-27 metro list | Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad — Income-tax Act, 2025, Schedule III, Table Sl. No. 11, read with Rule 279 of the Income-tax Rules, 2026 (CBDT Notification No. 22/2026, in force 1 April 2026). |
| 50% — 4 cities | FY 2025-26 metro list | Delhi, Mumbai, Kolkata, Chennai only — Income-tax Act, 1961, s.10(13A) read with Rule 2A of the Income-tax Rules, 1962. |
| 40% | Every other place | Any other city or town gets 40% of salary as limb (c), in both years. |
| Old regime only | The new regime gives no exemption | The HRA exemption is available only under the old tax regime. Under the new regime there is no HRA exemption (s.202 of the Income-tax Act, 2025; s.115BAC of the 1961 Act). |
| ₹1,00,000 | Landlord PAN — Form 12BB | If the rent you pay in a year is more than ₹1,00,000, your landlord PAN must be reported on Form 12BB. The calculator flags it when your annual rent crosses the line. |
| 10% of salary | Limb (b) — rent minus 10% | Rent paid minus 10% of salary (basic + DA). If the rent is below 10% of salary, this limb is ₹0 — it can never be negative, so the exemption is ₹0. |
| ₹60,000 — s.80GG | No HRA at all? A separate claim | If you receive no HRA, s.80GG allows a deduction of up to ₹60,000 a year for rent paid. It is a separate claim in your return — this calculator does not model it. |
The formula is arithmetic — the three limbs decide it. The year and the city decide which percentage limb (c) uses, and the regime decides whether there is any exemption at all.
Common mistakes
Four ways to get HRA wrong
The formula is short, but four readings trip people up. Each one can cost thousands in tax.
Using the whole pay packet as salary
Only basic + dearness allowance counts — not HRA, bonus or the rest of your CTC. Entering a ₹1,00,000 CTC as basic inflates both the 10% limb and the 50% limb, and the exemption with them.
Forgetting the city list — and the year
Only the listed cities get 50%, and the list depends on the year: Bengaluru, Hyderabad, Pune and Ahmedabad were 40% cities in FY 2025-26. On ₹80,000 basic the wrong year costs ₹60,000 of exemption. Check the year selector before you file.
Assuming the exemption follows you
The HRA exemption exists only under the old tax regime. If you opted for the new regime, the whole HRA is taxable — ₹3,00,000 a year on the Mumbai example — and no rent figure changes that.
Missing Form 12BB above ₹1 lakh of rent
If your annual rent is more than ₹1,00,000, your landlord PAN must be reported on Form 12BB — the calculator flags it. And you cannot claim at all if you live in your own house or in rent-free housing from your employer: the exemption is for rent actually paid.
Your questions, answered
HRA calculator FAQs
How is HRA exemption calculated in India?
With the least-of-three formula: exempt HRA is the smallest of (a) the HRA you actually receive, (b) the rent you pay minus 10% of your salary, and (c) 50% of your salary if you live in a metro city, else 40%. For ₹40,000 basic, ₹25,000 HRA and ₹20,000 rent in Mumbai: (a) ₹3,00,000 a year, (b) ₹2,40,000 minus ₹48,000 = ₹1,92,000, (c) 50% of ₹4,80,000 = ₹2,40,000 — the smallest is ₹1,92,000, so that much is tax-free and ₹1,08,000 is taxable.
Which cities get the 50% HRA exemption?
From FY 2026-27, eight cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad (Income-tax Act, 2025, Schedule III, Table Sl. No. 11, read with Rule 279 of the Income-tax Rules, 2026). In FY 2025-26 only four cities counted: Delhi, Mumbai, Kolkata and Chennai. Every other place gets 40% in both years.
Can I claim HRA under the new tax regime?
No. The HRA exemption is available only under the old tax regime. Under the new regime there is no HRA exemption (s.202 of the Income-tax Act, 2025; s.115BAC of the 1961 Act), so the whole HRA is added to your taxable salary. Switch the regime selector to New and the calculator shows ₹0 exempt with the full HRA taxable.
What salary counts for the HRA calculation?
Basic pay + dearness allowance forming part of retirement benefits, plus commission as a percentage of turnover where it applies. HRA itself, bonus and other allowances are not part of salary for this calculation. Never enter your gross salary or CTC as the basic — it inflates the 10% and 50% limbs and the exemption.
Do I need my landlord PAN?
If the rent you pay in a year is more than ₹1,00,000, your landlord PAN must be reported on Form 12BB. The calculator flags it the moment your annual rent crosses ₹1,00,000 — at ₹8,334 of rent a month the annual rent is ₹1,00,008, so the PAN is needed; at ₹8,333 a month it is ₹99,996, so it is not. Keep the rent agreement and rent receipts or bank proof either way.
What if my rent is less than 10% of my salary?
Then limb (b) — rent minus 10% of salary — is negative, and the calculator floors it at ₹0, so the exemption is ₹0. The least of the three limbs can never be negative. If your rent is low relative to your salary, very little or none of your HRA is exempt, even in a metro city.
Can I claim HRA if I pay rent to my parents?
Yes, if the arrangement is genuine: a written rent agreement, rent paid through the bank, and your parent showing the rent as income in their own return. The same three-limb formula applies — the calculator does not care who the landlord is.
What is Section 80GG?
Section 80GG is the deduction for rent paid by people who receive no HRA at all — up to ₹60,000 a year, subject to conditions (least of rent minus 10% of income, 25% of income, and ₹5,000 a month). It is a separate claim in your return, not part of the HRA exemption, so this calculator does not model it — it is noted here so you do not miss it.
Does this calculator send my numbers anywhere?
No. Every calculation runs entirely on this page — nothing is sent to a server, nothing is stored, and reloading the page clears your recent checks.
About the method
This page uses the statutory HRA exemption: exempt HRA = the least of (a) HRA actually received, (b) rent paid minus 10% of salary, (c) 50% of salary if the rented accommodation is in a metro city, else 40% of salary. Salary is basic pay + dearness allowance forming part of retirement benefits (plus commission as a percentage of turnover). Limb (b) is floored at ₹0 — it can never be negative. For FY 2025-26 the 50% cities are Delhi, Mumbai, Kolkata and Chennai (Income-tax Act, 1961, s.10(13A) read with Rule 2A of the Income-tax Rules, 1962). From FY 2026-27 the 50% list is eight cities — Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad (Income-tax Act, 2025, Schedule III, Table Sl. No. 11, read with Rule 279 of the Income-tax Rules, 2026 — CBDT Notification No. 22/2026, G.S.R. 198(E), 20 March 2026, in force 1 April 2026). The exemption is available only under the old tax regime; under the new regime there is no HRA exemption (s.202 of the Income-tax Act, 2025; s.115BAC of the 1961 Act). If the rent paid in a year is more than ₹1,00,000, the landlord PAN must be reported on Form 12BB. All figures are monthly inputs × 12 for the year, rounded to the nearest rupee.
Rules checked 12 November 2026: the least-of-three formula and the four-city list for FY 2025-26 under the 1961 Act; the eight-city list and the same formula for FY 2026-27 under the 2025 Act and CBDT Notification No. 22/2026; the new-regime bar; the ₹1,00,000 landlord PAN line on Form 12BB; and s.80GG (a deduction of up to ₹60,000 a year for rent paid by those who receive no HRA — a separate claim, noted in the FAQ, not modelled here). Cross-checked against the ranking HRA calculators: the IndiaFirst Life worked example — ₹40,000 basic, ₹25,000 HRA, ₹20,000 rent in Mumbai gives ₹1,92,000 exempt a year — on indiafirstlife.com; the MeraHRMS worked example — ₹50,000 basic, ₹20,000 HRA, ₹18,000 rent in a non-metro city gives ₹1,56,000 exempt and ₹84,000 taxable a year — on merahrms.com. One honest limit: the calculator takes basic + DA as a single figure, so it cannot split commission as a percentage of turnover out of the salary — if a large part of your pay is turnover commission, check the salary figure with your employer.
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