HRA Exemption Calculator
Find your exempt and taxable House Rent Allowance from Basic+DA, HRA received, rent paid and whether you live in a metro city.
How it works
Exempt HRA = least of (a) HRA received, (b) rent paid − 10% of Basic+DA, (c) 50% of Basic+DA in a metro (40% elsewhere) · Taxable HRA = HRA received − exempt
House Rent Allowance is only partly tax-free, and the exempt slice is the smallest of three limbs: the HRA your employer actually pays, the rent you pay above 10% of your Basic+DA, and a flat 50% of Basic+DA if you live in a metro or 40% if you do not. Whichever of these is lowest is the amount exempted, and the rest of the HRA is added to taxable income. Because the rent limb subtracts 10% of Basic+DA, paying little or no rent quickly shrinks the exemption.
Worked example
With ₹40,000 Basic+DA, ₹20,000 HRA received and ₹18,000 rent in a metro, the three limbs are ₹20,000 (HRA), ₹14,000 (rent − 10% of Basic) and ₹20,000 (50% of Basic). The least is ₹14,000, so ₹14,000 a month or ₹1.68 lakh a year is exempt and ₹6,000 a month is taxable.
Frequently asked questions
How is the HRA exemption worked out?
It is the least of three amounts: the HRA actually received, rent paid minus 10% of Basic+DA, and 50% of Basic+DA in a metro or 40% in a non-metro. The smallest of the three is exempt and the balance of your HRA is taxable.
Which cities count as metro for HRA?
For HRA purposes only Delhi, Mumbai, Kolkata and Chennai are treated as metros, where the city limb is 50% of Basic+DA. Everywhere else uses 40%, so where you live changes the exemption.
Can I claim HRA under the new tax regime?
No. The HRA exemption is available only under the old tax regime. The new regime, which is the default, has lower slab rates but removes most exemptions and deductions including HRA, so compare both before choosing.
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Educational estimate only, not tax advice. Gratuity, HRA and income-tax rules change with each Union Budget and depend on your exact salary structure and tax regime. Confirm with a qualified tax professional.