HRA Exemption Calculator
How much of your house rent allowance is tax-free under the old regime: the least of three limits.
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₹2,40,000 of your HRA is tax-free under the old regime; ₹0 is taxed as salary.
- HRA received₹2,40,000
- Rent paid − 10% of basic₹2,40,000
- 50% of basic₹3,00,000
- HRA that stays taxable₹0
How this is worked out
- Exempt HRA = the least of: HRA received; rent paid − 10% of basic; 50% of basic (eight cities) or 40% (elsewhere).
Assumptions
- All figures are for the whole year. Under the new regime HRA is fully taxable.
- Keep rent receipts; above 1 lakh of rent a year your employer will ask for the landlord's PAN.
HRA exemption, tax year 2026-27
From the 2026-27 tax year the 50% rate covers eight cities under the Income-tax Rules, 2026. The exemption applies only under the old regime.
In force from 1 April 2026 · checked by Savingy on 1 November 2026 · confirm with your employer or the Income Tax Department
The formula
Exempt HRA = least of: HRA received; rent paid − 10% of basic; 50% (or 40%) of basic
- Basic: basic salary plus dearness allowance, for the year
- 50% cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad from 2026-27; 40% elsewhere
The exemption applies only under the old regime.
A worked example
With a basic salary of ₹6,00,000, HRA of ₹2,40,000 and rent of ₹3,00,000 a year in a 50% city, ₹2,40,000 of the HRA is tax-free.
Questions people ask
How is HRA exemption calculated?
Three figures are compared for the year: the HRA you received, the rent you paid minus 10% of your basic salary, and half of basic in the eight listed cities (40% elsewhere). The smallest of the three is tax-free; the rest of your HRA is taxed as salary.
Which cities get the 50% HRA limit?
From the 2026-27 tax year, Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad, under the Income-tax Rules, 2026. Before that only the first four did. Check with your employer if you are unsure which list your payroll uses.
Can I claim HRA under the new tax regime?
No. Under the new regime HRA is fully taxable. Use the old versus new regime calculator to see whether the exemption makes the old regime cheaper for you.
What proof do I need for HRA?
Rent receipts or a rent agreement. When rent is more than one lakh a year, your employer will also ask for your landlord's PAN.
From the Savingy Guide
Related calculators
- Old vs New Tax Regime Calculator: Compare your income tax under the old and new regimes for 2026-27: slabs, the 12 lakh rebate, marginal relief and the deductions the old regime allows.
- Rent vs Buy Calculator: Rent or buy a home in India: EMI, stamp duty, upkeep, rent rises and returns on the difference, with what each owns after the years you choose.
Sources
Estimates are for illustration only and assume constant returns. Actual returns vary with market conditions. This is not investment advice.