HRA Exemption Calculator

Calculate your House Rent Allowance tax exemption under the Old Tax Regime. The exemption is the minimum of three methods — this calculator shows all three.

Your Salary & Rent Details

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Enter only Basic + DA, not gross salary

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⚠️ Important Conditions
  • HRA exemption is only under Old Tax Regime
  • Rent > ₹1 lakh/year: landlord PAN required
  • Not available if you own the house you live in
  • Rent paid to family members may not be allowed

How HRA Exemption Works in India

House Rent Allowance (HRA) is a component of your salary package that helps cover your rental expenses. Under the Old Tax Regime, you can claim HRA as a tax exemption — meaning that portion of your income won't be taxed.

The Three-Method Rule

The Indian Income Tax Act mandates that HRA exemption is the lowest of the following three amounts:

  • Method 1: The actual HRA component you receive in your salary
  • Method 2: Actual rent paid minus 10% of your Basic Salary (+ DA if applicable)
  • Method 3: 50% of Basic Salary if you live in Mumbai, Delhi, Kolkata, or Chennai; 40% for all other cities

Example Calculation

If your Annual Basic = ₹6,00,000, HRA Received = ₹2,40,000, Rent Paid = ₹1,80,000, in a metro city:

  • Method 1: ₹2,40,000
  • Method 2: ₹1,80,000 − ₹60,000 (10%) = ₹1,20,000
  • Method 3: 50% of ₹6,00,000 = ₹3,00,000
  • Exemption = ₹1,20,000 (the minimum)

HRA Under New vs Old Regime

HRA exemption is not available under the New Tax Regime (default from FY 2023-24). To claim HRA, you must opt into the Old Tax Regime when filing your ITR. Use our Income Tax Calculator to compare which regime is better for you after considering HRA and other deductions.

Frequently Asked Questions

House Rent Allowance (HRA) exemption allows salaried employees who receive HRA as part of their salary and pay rent to reduce their taxable income. It is only available under the Old Tax Regime. Self-employed individuals cannot claim HRA exemption but can claim rent as a business expense.
HRA exemption is the minimum of three amounts: (1) Actual HRA received from employer, (2) Rent paid minus 10% of basic salary, and (3) 50% of basic salary for metro cities (Mumbai, Delhi, Kolkata, Chennai) or 40% for non-metro cities.
Only four cities are classified as metro for HRA purposes: Mumbai, Delhi (NCR), Kolkata, and Chennai. All other cities including Bengaluru, Hyderabad, Pune, and Ahmedabad are considered non-metro, giving 40% of basic salary as the Method 3 limit.
No. HRA exemption is only available if you are actually paying rent. If you own the house you live in, you cannot claim HRA exemption even if your employer pays you HRA. The HRA received will be fully taxable.
Yes. If your annual rent payment exceeds ₹1 lakh, you must provide your landlord's PAN card to your employer. For rent above ₹15,000/month, you must submit rent receipts. If rent is paid to a relative, the exemption can be denied if the transaction is not genuine.

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