Calculate your House Rent Allowance exemption under Section 10(13A) read with Rule 2A. See the three statutory limits, your estimated exempt HRA and the balance that remains taxable.
HRA Calculator
Use figures for the same calculation period. If salary, rent or city changed during the year, calculate each period separately.
How is HRA exemption calculated?
For a salaried taxpayer eligible to claim HRA under the old tax regime, the exempt amount is generally the least of the following three amounts:
The HRA actually received from the employer for the relevant period.
Actual rent paid less 10% of salary for HRA purposes.
50% if the house is in Delhi, Mumbai, Kolkata or Chennai; 40% for every other city.
The balance of HRA received, after the eligible exemption, remains taxable as salary.
What does “salary” mean for HRA calculation?
For Rule 2A, salary is not the same as total CTC. It generally includes the following components for the relevant period:
| Component | Included for HRA salary? |
|---|---|
| Basic salary | Yes |
| Dearness Allowance | Yes, if it forms part of salary for retirement benefits under the terms of employment. |
| Commission | Yes, if it is based on a fixed percentage of turnover achieved by the employee under the employment terms. |
| Other allowances and perquisites | Generally not included merely because they appear on the salary slip. |
HRA metro cities: only four cities get the 50% limit
For HRA exemption under Rule 2A, the 50% salary limit applies only when the rented house is situated in Delhi, Mumbai, Kolkata or Chennai. Other cities use the 40% salary limit.
HRA exemption example
Basic salary + eligible DA: ₹6,00,000
HRA received: ₹2,40,000
Rent paid: ₹3,00,000
Rented house: Delhi
Actual HRA received: ₹2,40,000
Rent paid minus 10% of salary: ₹3,00,000 − ₹60,000 = ₹2,40,000
50% of salary: ₹3,00,000
Eligible HRA exemption: ₹2,40,000, being the lowest of the three limits.
Why is the HRA option not showing while filing ITR?
One of the first things to check is your selected tax regime. HRA exemption under Section 10(13A) is available under the old tax regime and is not available under the new tax regime. The new regime is the default regime, so taxpayers intending to claim old-regime exemptions should ensure the applicable old-regime option has been validly selected while filing.
For AY 2026-27, the return relates to income earned during FY 2025-26 and is filed under the Income-tax Act, 1961, even though filing takes place after the Income-tax Act, 2025 came into force.
HRA exemption requires actual rent expenditure
Simply receiving HRA does not make it tax-free. HRA exemption is linked to actual rent expenditure for residential accommodation occupied by the employee. If you live in your own house or do not actually pay rent, the HRA received is generally fully taxable.
Changed salary, rent or city during the year?
If you changed jobs, received a salary revision, changed rent, moved house, moved between one of the four specified cities and another location, or received HRA only for part of the year, a single annual figure may not accurately reflect your exemption.
Calculate HRA separately for each period in which the relevant salary, HRA, rent or city conditions were the same, and then aggregate the eligible exemption.
Documents you should keep for an HRA claim
- Rent receipts and proof of rent payment.
- Rent agreement, where available.
- Form 16 and salary breakup showing HRA received.
- Landlord details and supporting rental information.
- Landlord PAN where required. Income Tax Department guidance states that reporting the landlord’s PAN to the employer is mandatory where annual rent paid exceeds ₹1,00,000.
Common HRA mistakes to avoid
Only Delhi, Mumbai, Kolkata and Chennai get the 50% salary limit under Rule 2A.
Section 10(13A) exemption is not available under the new tax regime.
HRA salary has a specific definition and is not total CTC.
There must be actual rent expenditure for eligible residential accommodation.
Changes in salary, HRA, rent or city may require period-wise calculations.
The exemption is restricted to the lowest of the three Rule 2A limits.
HRA Calculator FAQs
Is HRA exemption available in the new tax regime?
No. HRA exemption under Section 10(13A) is available under the old tax regime and is not available under the new tax regime.
Which cities qualify for the 50% HRA salary limit?
Delhi, Mumbai, Kolkata and Chennai. For other cities, the relevant limit is 40% of salary.
Is Bengaluru a metro city for HRA calculation?
No for this specific Rule 2A calculation. A rented house in Bengaluru falls under the 40% salary limit.
Is Pune a metro city for HRA exemption?
No for the Rule 2A 50% limit. Pune falls under the 40% salary category.
Can the entire HRA received be tax-free?
Yes, but only where actual HRA received is the lowest of the three prescribed limits. Otherwise, only the lower eligible amount is exempt.
Can I claim HRA if I live in my own house?
Generally no, because the exemption is linked to actual rent expenditure. HRA received while living in your own house without paying rent is generally taxable.
What if rent paid is less than 10% of salary?
The “rent paid minus 10% of salary” limit would be nil or negative, so the HRA exemption would effectively be nil for that calculation period.
Need help with ITR filing or HRA reconciliation?
TaxClear can assist where Form 16, salary details, rent changes or the exemption you calculate do not match your return.
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