HRA Exemption Calculator (Section 10(13A))

Quick answer

Your tax-free HRA is the lowest of three amounts: the HRA actually received, rent paid minus 10% of salary, and 50% of salary if you live in Delhi, Mumbai, Kolkata or Chennai (40% elsewhere). Here, "salary" means basic plus DA. The rest of your HRA is taxable. The exemption is available only in the old tax regime, and you get nothing if you pay no rent.

How to use this HRA calculator

You need four numbers, all for the full year. Take them from your salary slips or offer letter, and from your rent agreement.

1. Basic salary + DA (yearly) — your basic pay plus dearness allowance for the year. If your slip shows ₹50,000 basic a month, enter ₹6,00,000. Include DA only if it counts for retirement benefits; for most private-sector employees there is no DA, so basic alone is enough.
2. HRA received (yearly) — the house rent allowance paid by your employer for the year, as shown on your salary slip or Form 16.
3. Rent paid (yearly) — the total rent you actually paid for the house you live in. Do not include maintenance or electricity unless they are part of the agreed rent.
4. City you live in — choose "Delhi, Mumbai, Kolkata or Chennai (50%)" or "Other city (40%)". What matters is the city where the rented house is, not where your office is registered.

The calculator then shows your tax-free HRA and your taxable HRA for the year. Below that you see the three amounts compared — HRA received, rent minus 10% of salary, and 50% or 40% of salary — with the lowest one picked as the exemption. If your rent is above ₹1 lakh a year, it reminds you to give your employer the landlord's PAN.

Basic salary and HRA must both be filled in; without them there is nothing to calculate. If you pay no rent, leave rent at zero and the calculator will correctly show that the whole HRA is taxable.

The HRA exemption rule explained

The exemption comes from Section 10(13A) of the Income-tax Act read with the income-tax rules. Every month of the year in which you live in a rented house and receive HRA, the exempt part is the least of these three:

Whatever is left after the exemption is added to your taxable salary. The calculator works on yearly totals, which gives the same answer as a monthly calculation when your salary, HRA, rent and city stay the same all year. When they change, read the section on mid-year changes below.

A short legal note: the Income-tax Act, 2025 applies from 1 April 2026 and, from tax year 2026-27, gives new numbers to sections such as 10(13A), 80GG and 194-IB. The calculator follows the rule shown here, and the list of 50% cities is whatever the rules notify for the year.

What counts as "salary" for HRA

For limits B and C, salary means basic pay, plus dearness allowance if it forms part of retirement benefits, plus commission paid as a fixed percentage of turnover achieved. It does not include HRA itself, special allowance, bonus, LTA, overtime or other allowances. This is why people with a low basic and a high special allowance often get a smaller exemption than they expect.

Salary for the relevant period only

Salary is taken only for the months you lived in rented accommodation. If you moved into a rented flat in October, only October to March salary, HRA and rent are counted.

Worked examples

All amounts are yearly and were checked using the calculator's own formula.

Example 1: Delhi, rent-based limit applies

Karan lives in Delhi. Basic salary ₹6,00,000, HRA received ₹3,00,000, rent paid ₹3,00,000 (₹25,000 a month).

• A. HRA received: ₹3,00,000
• B. Rent − 10% of salary: ₹3,00,000 − ₹60,000 = ₹2,40,000
• C. 50% of salary: ₹3,00,000

Tax-free HRA is ₹2,40,000 and taxable HRA is ₹60,000. If Karan is in the 30% slab under the old regime, this exemption saves him about ₹74,880 including 4% cess.

Example 2: Ghaziabad, salary-share and rent limits

Pooja lives in Ghaziabad. Basic ₹6,00,000, HRA ₹2,40,000, rent ₹2,16,000 (₹18,000 a month).

• A. HRA received: ₹2,40,000
• B. Rent − 10% of salary: ₹2,16,000 − ₹60,000 = ₹1,56,000
• C. 40% of salary: ₹2,40,000

Tax-free HRA is ₹1,56,000, and ₹84,000 is taxable. At a 20% slab the saving is about ₹32,448 with cess.

Example 3: Whole HRA tax-free

Imran lives in Lucknow. Basic ₹4,80,000, HRA ₹1,92,000, rent ₹3,60,000 (₹30,000 a month).

• A. HRA received: ₹1,92,000
• B. Rent − 10% of salary: ₹3,60,000 − ₹48,000 = ₹3,12,000
• C. 40% of salary: ₹1,92,000

The lowest is ₹1,92,000, so his entire HRA is exempt and nothing is taxable. Paying more rent would not increase his exemption.

Example 4: Low rent, high salary

Divya lives in Mumbai. Basic ₹9,00,000, HRA ₹4,50,000, and she pays ₹15,000 a month (₹1,80,000) to share a flat.

• A. HRA received: ₹4,50,000
• B. Rent − 10% of salary: ₹1,80,000 − ₹90,000 = ₹90,000
• C. 50% of salary: ₹4,50,000

Only ₹90,000 is tax-free and ₹3,60,000 is taxable. When rent is low compared with salary, limit B decides everything. If rent were below ₹90,000 a year (10% of her salary), the exemption would be nil.

Example 5: Moved into a rented flat mid-year

Sameer lived with his parents until September and rented a flat in Jaipur from October at ₹25,000 a month. His basic is ₹60,000 a month and HRA ₹24,000 a month. Only October to March counts, so he enters basic ₹3,60,000, HRA ₹1,44,000 and rent ₹1,50,000.

• A. HRA received for the period: ₹1,44,000
• B. Rent − 10% of salary: ₹1,50,000 − ₹36,000 = ₹1,14,000
• C. 40% of salary: ₹1,44,000

Tax-free HRA is ₹1,14,000. The HRA for April to September (₹1,44,000) is fully taxable because he paid no rent in those months.

Reading your result: which limit decides?

The three amounts in the result tell you more than the final number. Whichever is lowest is the limit that controls your exemption, and each one points to a different situation.

If "HRA received" is lowest

Your whole HRA is already tax-free. Paying more rent will not save more tax, because the exemption cannot go above the allowance itself. Any further benefit would need a higher HRA component in your salary.

If "rent paid − 10% of salary" is lowest

Your rent is the limiting factor. This is common for people who share a flat or live in a smaller city. Every extra rupee of genuine rent, up to the next limit, increases the exemption one for one. It also means that a salary hike in basic pay slightly reduces your exemption, because 10% of salary goes up.

If "50% or 40% of salary" is lowest

Your basic pay is the cap. This happens when rent and HRA are both high but basic is low compared with them, for example in salary structures with a large special allowance. Only a higher basic, or living in one of the four metros, would raise this limit.

When rent, salary or city changes during the year

The law applies the three limits for the period in which each set of facts holds. If your rent goes up in the middle of the year, you get a raise, or you move between a metro and another city, calculate each period separately and add the results. A single yearly calculation can overstate the exemption.

Example: rent increase in October

Basic ₹50,000 a month, HRA ₹20,000 a month, non-metro city. Rent is ₹20,000 a month from April to September and ₹35,000 a month from October to March.

• April–September, each month: HRA ₹20,000; rent − 10% = ₹15,000; 40% of salary = ₹20,000. Exempt ₹15,000 × 6 = ₹90,000.
• October–March, each month: HRA ₹20,000; rent − 10% = ₹30,000; 40% of salary = ₹20,000. Exempt ₹20,000 × 6 = ₹1,20,000.
• Total exemption: ₹2,10,000.

Putting the yearly totals into the calculator (basic ₹6,00,000, HRA ₹2,40,000, rent ₹3,30,000) would show ₹2,40,000 — ₹30,000 too high. In such cases, run the calculator once for each period, entering that period's totals, and add the answers.

HRA and the two tax regimes

HRA exemption exists only in the old regime. In the new regime the whole HRA is taxable, but you get a larger standard deduction and lower slab rates. So a big HRA exemption is one of the main reasons some people still choose the old regime.

Do not decide on HRA alone. Put the exempt amount from this calculator into the HRA field of our income tax calculator together with your other deductions, and it will show which regime gives the lower total tax.

How much can HRA really save?

The tax saved equals the exempt HRA multiplied by your marginal rate in the old regime, plus cess. As a rough guide:

For example, the ₹1,68,000 exemption each spouse gets in the shared-flat example further down saves ₹34,944 a year for a spouse in the 20% slab and ₹52,416 for a spouse in the 30% slab. Running the HRA exemption calculator with your own figures and then multiplying by your slab rate gives a quick, reliable estimate.

Surcharge, where it applies, adds a little more. Remember the comparison is with the new regime, not with zero, so the real benefit is whatever is left after comparing both regimes in full.

Special situations: relatives, flatmates and more

Rent to parents

You can claim HRA for rent paid to a parent who owns the house, if the arrangement is genuine. Pay by bank transfer, have a simple rent agreement, and make sure your parent shows the rent as income in their own return. Without these, the claim is easy to question.

Rent to spouse

Rent paid to your husband or wife is generally not accepted, because spouses usually live together as one household. It is best avoided.

Living in a house you own

If you live in your own house, you pay no rent, so there is no HRA exemption. Rent paid to a co-owner for your own share is not rent either.

Own house in another city

If you own a house in your home town but rent a flat in the city where you work, you can claim HRA for the rented flat. In the old regime you can also claim home-loan interest on the other house within the limits. Our home loan tax benefit calculator shows that side of the saving.

Sharing a flat with flatmates

Each person can claim HRA only for the rent they actually pay. If three friends split a ₹45,000 rent equally, each enters ₹15,000 a month (₹1,80,000 a year) as rent paid. Ask the landlord for separate receipts in each name, or one receipt that shows each person's share.

Husband and wife both paying rent

If both spouses earn HRA and both pay rent for the same flat, each can claim for their own share of the rent, provided the payments really come from their own accounts. For example, a couple in Delhi paying ₹40,000 a month and splitting it equally: each has basic ₹7,20,000, HRA ₹3,00,000 and rent ₹2,40,000. For each of them, rent minus 10% of salary is ₹1,68,000, 50% of salary is ₹3,60,000 and HRA is ₹3,00,000, so each gets ₹1,68,000 tax-free. Splitting rent on paper while one person pays it all does not hold up.

Security deposit and advance rent

A refundable security deposit is not rent and does not count. Rent paid in advance counts only for the months it covers within the year.

Company-leased accommodation

If your employer provides a flat instead of paying HRA, there is no HRA to exempt. The value of the accommodation is taxed as a perquisite under separate rules, which this calculator does not cover.

Working remotely from another city

The 50% or 40% rate depends on where your rented home is. If your employer is in Mumbai but you work from a rented flat in Indore, use 40%. Tell your employer your actual city so TDS is worked out correctly.

Notice period and gaps between jobs

HRA is exempt only for months in which you received HRA and paid rent. For a gap between two jobs with no salary, there is no HRA to exempt. When you change jobs, run the calculator separately for each employer's period and add the results.

Where HRA shows up in Form 16 and your ITR

In Form 16 Part B, the exempt HRA appears under allowances exempt under Section 10, as an amount under 10(13A). Gross salary includes the full HRA, and the exempt part is then subtracted.

In your return, the salary schedule asks for exempt allowances. Pick the HRA option from the list and enter the exempt amount. Under the old regime, this should match what this HRA calculator shows for your figures — or what your employer allowed, if you are not changing it. If you choose the new regime in your return, the exempt HRA must be removed and the full HRA becomes taxable, even if your employer had allowed it during the year.

If the HRA you claim in the return is higher than in Form 16, the difference should be supported by proofs you can produce on request. A short note of how you worked it out, with each period shown separately, is useful to keep with your records.

Missed HRA with your employer? Claim it in the return

Employers often stop accepting proofs in January or February. If you missed the deadline, your Form 16 will show the full HRA as taxable and extra TDS will have been deducted. You can still claim the correct exemption while filing your own return under the old regime and get the excess tax back as a refund.

Keep the same proofs ready — rent receipts, agreement, landlord PAN and bank records — because a claim that differs from Form 16 can draw questions later. Work out the exact figure with this HRA calculator so the number you claim is defensible.

Proofs your employer and the department expect

• Rent receipts for each month, signed by the landlord, showing the amount, period and address. Our rent receipt generator makes printable receipts in a few minutes.
• Landlord's PAN if rent is more than ₹1 lakh in the year. If the landlord has no PAN, a declaration from the landlord is usually asked for.
• Rent agreement, especially when the landlord is a relative or the rent is high.
• Bank records of rent payments. Paying by bank transfer is the simplest proof.
• Form 12BB declaration to your employer listing rent and landlord details.

If your monthly rent is more than ₹50,000, an individual tenant has to deduct TDS at 2% on the rent under Section 194-IB and deposit it. If your landlord is an NRI, TDS applies on any rent amount, at higher rates, and you need a TAN. Check these before you pay, because missing TDS creates trouble for you, not the landlord.

No HRA in your salary? Look at Section 80GG

Self-employed people, and employees whose salary has no HRA component, can claim a deduction for rent under Section 80GG in the old regime. The deduction is the least of:

• ₹5,000 a month (₹60,000 a year);
• 25% of total income for the year (before this deduction);
• rent paid minus 10% of total income.

For example, with total income of ₹8,00,000 and rent of ₹1,80,000 a year, the three limits are ₹60,000, ₹2,00,000 and ₹1,00,000, so the deduction is ₹60,000. You must not own a house in the city where you live and work, and you file Form 10BA on the income tax portal before claiming it. This calculator does not compute 80GG; it handles only HRA from salary.

Common mistakes with HRA

• Using gross salary instead of basic + DA. Limits B and C use only basic plus eligible DA. Using CTC or gross salary inflates the exemption.
• Picking 50% for the wrong city. The calculator uses the four metros — Delhi, Mumbai, Kolkata and Chennai. Satellite cities around them are treated as other cities unless the rules for the year say otherwise.
• Calculating on yearly totals when things changed. As the rent-increase example shows, this can overstate the exemption.
• Claiming HRA in the new regime. It is not allowed. If your employer is deducting TDS under the new regime, HRA proofs make no difference to your tax.
• Claiming rent for months you did not live there. Exemption is only for the period you actually occupied the rented house.
• Cash rent without receipts. Without receipts or bank proof, the claim is weak. For a single cash payment above ₹5,000, a revenue stamp signed by the landlord is commonly required.
• Ignoring the landlord's side. If your landlord does not report the rent, a mismatch can surface in scrutiny. This matters most when the landlord is a family member.

Planning your rent and salary structure

If you are negotiating a new offer or a salary restructure, a few points help. A higher basic raises limits B and C, but it also raises PF and gratuity, so look at the full picture. An HRA component that roughly matches 40% or 50% of basic gives room for the full exemption if your rent is high enough.

On the rent side, the exemption grows with rent only until limit A or C is reached. Beyond that point, paying more rent does not reduce tax. Run the calculator with different rent figures to see where your exemption stops growing.

Declare your rent to your employer early in the year, so TDS is lower from the first month, and submit proofs on time. You can prepare the declaration with our Form 12BB generator.

Checklist for the year

1. April–May: decide your regime. If the old regime is better, declare your monthly rent and landlord details to your employer so TDS reflects the exemption from the start.
2. Every month: pay rent by bank transfer and collect a signed receipt. Note any change in rent, address or city on the date it happens.
3. When anything changes: a new flat, a rent increase, a transfer to another city or a salary revision all start a new period. Keep a simple record of the dates.
4. January–March: submit rent receipts, the agreement and the landlord's PAN (if rent is above ₹1 lakh a year) before your employer's deadline.
5. After you get Form 16: check the exempt HRA it shows against this calculator. If your employer allowed less than you are entitled to, claim the correct figure in your return.
6. At filing: confirm your regime once more. In the new regime, HRA is fully taxable regardless of what was allowed during the year.

Following these steps keeps your HRA claim simple to prove, and makes sure your employer's TDS and your final return tell the same story.

Get it checked by an expert

HRA claims are among the most common reasons for questions after filing, especially with rent to relatives or mid-year changes. A TaxCaller tax expert can check your HRA working, proofs and regime choice, and file your return with the correct figures. You are told the fee upfront before any work starts, and the first call is free. Visit our income tax filing service to begin.