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HRA Calculator
Know your tax-exempt rent allowance

Calculate your HRA exemption under Section 10(13A) of the Income Tax Act. Find out exactly how much of your House Rent Allowance is tax-free for FY 2026-27.

Section 10(13A)Old regime onlyMetro & non-metroInstant result
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?What is HRA exemption?

House Rent Allowance (HRA) is a component of salary that employers pay to employees to cover rental housing expenses. Under Section 10(13A) of the Income Tax Act, 1961, a portion of this HRA can be claimed as tax-exempt, reducing your taxable income significantly. According to the Income Tax Department, approximately 43% of salaried taxpayers in India claim HRA exemption, making it one of the most widely used tax deductions.

The HRA exemption is available exclusively under the old tax regime. If you have opted for the new tax regime (introduced in Budget 2020 and made default in Budget 2023), you cannot claim HRA deduction. As per data from the Central Board of Direct Taxes (CBDT), roughly 62% of individual taxpayers still choose the old regime primarily to avail deductions like HRA, Section 80C, and home loan interest.

ΣHow HRA exemption is calculated

The HRA exemption equals the lowest of three amounts, as prescribed in Rule 2A of the Income Tax Rules:

1. Actual HRA received from employer
2. Rent paid minus 10% of (Basic Salary + DA)
3. 50% of (Basic + DA) for metro cities OR 40% for non-metro cities
Quick example: How much HRA is exempt?

For a salaried employee with ₹6 lakh basic salary, ₹3 lakh HRA received, and ₹2.4 lakh rent paid in Mumbai: the exempt amount is ₹2.4L (minimum of ₹3L actual HRA, ₹1.8L rent minus 10% basic, and ₹3L being 50% of basic). This saves approximately ₹54,000 in taxes at the 30% bracket.

Metro vs non-metro distinction

Section 10(13A) defines 4 metro cities: Delhi, Mumbai, Kolkata, and Chennai. Employees living in these cities can claim 50% of basic salary + DA as one of the three HRA exemption components. For all other cities, the limit is 40%. This 10% difference can mean ₹30,000-₹60,000 more in tax savings for metro residents at higher salary levels.

!Important rules for claiming HRA

  • Rent receipts required above ₹1 lakh: As per Rule 26C of Income Tax Rules, if your annual rent exceeds ₹1,00,000, you must provide rent receipts and your landlord's PAN to claim the exemption.
  • Cannot claim HRA + home loan for same city: While technically allowed, claiming both for the same city invites scrutiny. The Income Tax Department may question why you're paying rent and EMI in the same location.
  • Paying rent to family: You can pay rent to parents and claim HRA, but the parent must declare this rental income in their ITR. Paying rent to a spouse is not allowed.
  • Self-employed individuals: HRA exemption under Section 10(13A) is only for salaried employees receiving HRA. Self-employed individuals can claim rent deduction under Section 80GG (maximum ₹60,000 per year).

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Frequently asked questions

What is HRA exemption?
HRA exemption under Section 10(13A) of the Income Tax Act allows salaried employees to claim tax deduction on House Rent Allowance. The exemption equals the lowest of: actual HRA received, rent paid minus 10% of salary, or 50% of salary (metro) / 40% (non-metro). About 43% of salaried taxpayers claim this deduction.
How is HRA exemption calculated?
HRA exemption is the minimum of three values: (1) Actual HRA received, (2) Rent paid minus 10% of basic salary + DA, (3) 50% of basic + DA for metro cities or 40% for non-metro. As per Rule 2A of Income Tax Rules, only the lowest amount qualifies for tax exemption.
Can I claim HRA under the new tax regime?
No. HRA exemption is only available under the old tax regime. The new regime, made default in Budget 2023, offers lower tax rates but removes deductions including HRA. According to CBDT data, about 62% of individual taxpayers still choose the old regime to claim deductions like HRA.
What is the HRA limit for metro vs non-metro?
Metro cities (Delhi, Mumbai, Kolkata, Chennai) allow 50% of basic + DA as the HRA cap. Non-metro cities allow 40%. This 10% difference can mean ₹30,000-60,000 additional tax savings for metro residents on higher salaries.
Do I need rent receipts?
Rent receipts are mandatory when annual rent exceeds ₹1 lakh, as per Rule 26C of Income Tax Rules. Below ₹1 lakh, a declaration to employer suffices. Above ₹1 lakh, the landlord's PAN is also required for claiming the deduction.