HRA Exemption Calculator

The exempt part of your HRA is the lowest of three amounts. The calculator works monthly and opens with basic salary plus DA of ₹50,000, HRA of ₹20,000 and rent of ₹18,000 in a metro city:

The lowest is ₹13,000, so ₹13,000 a month (₹1,56,000 a year) is exempt and the remaining ₹7,000 a month (₹84,000 a year) is added to your taxable salary. If your income falls in the 30% old-regime slab, that exemption saves about ₹48,700 a year including 4% cess.

Look at which of the three rows is the smallest, because it shows what is holding your exemption back.

• Rent minus 10% is lowest (as in the default): your rent is the constraint. At ₹25,000 rent on the same salary, this row becomes ₹20,000 and the full HRA is exempt. That is not a reason to pay more rent, though: each extra rupee of rent saves at most about 31 paise of tax.
• Actual HRA is lowest: you already get the full benefit, and the rest depends on how your employer splits your pay.
• The 50% or 40% limit is lowest: your basic salary is small relative to your rent and HRA. The city you live in matters most here.

"Salary" in all three rows means basic pay plus DA that counts for retirement benefits, plus any commission paid as a fixed percentage of turnover. Enter that total in the first box, not your gross or CTC.

From 1 April 2026, the 50% limit applies to Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Up to FY 2025-26, only the first four qualified. As reported, the rule now sits in section 11 read with Schedule III of the Income-tax Act, 2025, with the calculation in Rule 279 of the Income-tax Rules, 2026.

Here is what the change is worth for a tenant in Pune with basic plus DA of ₹40,000, HRA of ₹20,000 and rent of ₹25,000. As a metro, the limits are ₹20,000, ₹21,000 and ₹20,000, so ₹20,000 a month is exempt. Under the old 40% rule it would have been ₹16,000. That is ₹48,000 a year more exemption, worth about ₹15,000 of tax in the 30% slab including cess. If you live in one of the four newly added cities, make sure your employer's payroll uses the metro setting.

HRA exemption exists only in the old regime. In the new regime, which is the default, your entire HRA is taxable whatever rent you pay. Use the annual figure from this calculator as one of your old-regime deductions when you compare the two regimes.

• You live in your own house or pay no rent: the rent row is zero, so nothing is exempt and the full HRA is taxable.
• Rent is at or below 10% of salary: for example, ₹4,000 rent on ₹50,000 basic. The rent row is again zero.
• Rent, salary or city changed during the year: run the calculator once for each period and add up the months, rather than entering an average.