HRA exemption calculator: Section 10(13A), metro and non-metro
Enter your monthly basic, HRA and rent. The calculator applies the least-of-three rule from Rule 2A, shows the exempt and taxable parts for the month and the year, estimates the tax you save, and flags the landlord-PAN and TDS rules that apply above ₹1 lakh and ₹50,000.
FY 2026-27 · old regime only · runs entirely in your browser, nothing is sent to a server
Where do you live?
Only Delhi, Mumbai, Kolkata and Chennai count as metro for HRA. Bengaluru, Hyderabad, Pune and every other city are non-metro.
Your monthly figures
Your tax slab (old regime)
Used only to estimate the tax you save. Pick the highest rate your income reaches under the old regime.
HRA exemption
Least of the three amounts is exempt under Section 10(13A) read with Rule 2A. Salary means basic plus DA that counts for retirement benefits, plus commission at a fixed percentage of turnover.
How HRA exemption is calculated
House rent allowance is exempt from tax under Section 10(13A) of the Income-tax Act, 1961, to the extent set by Rule 2A of the Income-tax Rules. The exempt amount is the least of three figures, worked out for the period you actually paid rent:
- The HRA you received from your employer.
- Rent paid minus 10% of salary.
- 50% of salary if the rented house is in Delhi, Mumbai, Kolkata or Chennai; 40% anywhere else.
“Salary” for this rule means basic pay, plus dearness allowance if it counts towards retirement benefits, plus commission paid as a fixed percentage of turnover. Special allowance, bonus and other allowances are excluded. Whatever HRA is not exempt is added to your taxable salary. The exemption exists only in the old tax regime; the new regime, which has been the default since FY 2023-24, taxes HRA in full.
A worked example
Basic ₹40,000 a month, HRA ₹20,000, rent ₹18,000, flat in Mumbai. The three tests: HRA received ₹20,000; rent minus 10% of salary = 18,000 − 4,000 = ₹14,000; 50% of salary = ₹20,000. The least is ₹14,000, so ₹1,68,000 a year is exempt and ₹72,000 is taxed. At the 20% slab with 4% cess, the exemption saves ₹34,944 a year. Move the same flat to Pune and the third test drops to ₹16,000, but the second test still binds, so the answer does not change — which is why the rent, not the city, usually decides the result.
Which cities are metro for HRA
| Metro (50%) | Non-metro (40%) |
|---|---|
| Delhi | Bengaluru, Hyderabad, Pune, Ahmedabad, Gurugram, Noida |
| Mumbai (Greater Mumbai) | Navi Mumbai and Thane are not Greater Mumbai for this rule |
| Kolkata | Every other city and town |
| Chennai |
The list has not been updated since 1996, which is why the fastest-growing cities are non-metro for HRA. Proposals to add Bengaluru and Hyderabad have been discussed but not enacted.
Rent receipts, landlord PAN and TDS
- Rent receipts or bank transfers for the whole period; employers ask for them with the investment declaration.
- Landlord’s PAN once rent exceeds ₹1,00,000 a year (₹8,334 a month). If the landlord has no PAN, a declaration with name and address.
- TDS at 2% under Section 194-IB if rent exceeds ₹50,000 a month, deducted once a year via Form 26QC — no TAN needed.
- If your employer did not allow the exemption, you can still claim it in the return under the old regime with the same evidence.
Paying rent to parents or a spouse
Rent paid to parents qualifies if the house is theirs, the money actually moves, and they declare it as income from house property. Rent to a spouse is routinely rejected because the household is treated as one economic unit. Owning a house in the same city does not bar the claim by itself, but claiming HRA and living in your own house does.
No HRA? Section 80GG
Self-employed people and employees whose pay has no HRA component can deduct rent under Section 80GG: the least of ₹5,000 a month, 25% of total income, and rent minus 10% of total income — provided neither you nor your spouse or minor child owns a house where you live or work. File Form 10BA with the return. Old regime only.
Old or new regime?
The HRA exemption is the most common reason the old regime beats the new one, but it has to overcome the new regime’s lower rates and its ₹75,000 standard deduction. Run both in the income tax calculator with your HRA exemption from this page entered as a deduction; the salary calculator shows the monthly in-hand under each.
Common questions
It is the least of three amounts: the HRA you actually received; rent paid minus 10 percent of salary (basic plus dearness allowance); and 50 percent of salary if you live in Delhi, Mumbai, Kolkata or Chennai, or 40 percent elsewhere. The exemption is available only under the old tax regime.
The third limb of the exemption test for a non-metro city: 40 percent of basic salary plus DA. For Delhi, Mumbai, Kolkata and Chennai the figure is 50 percent. Bengaluru, Hyderabad, Pune and every other city count as non-metro for HRA.
No. Employers commonly pay HRA at 40 to 50 percent of basic, but the exemption is the least of three tests, and 50 percent applies only in the four metro cities. HRA received above the exempt amount is taxable.
The same way as before: least of HRA received, rent minus 10 percent of salary, and 50 or 40 percent of salary, computed on the annual figures or month by month if salary or rent changed. It applies only if you opt for the old regime when filing for FY 2026-27.
No. The new regime, which is the default, does not allow the HRA exemption. Compare both regimes before choosing; HRA plus 80C and home-loan interest is the usual reason the old regime wins.
Yes if the rent exceeds ₹1,00,000 a year. If the landlord has no PAN, a signed declaration with their name and address is accepted by most employers. Above ₹50,000 a month you must also deduct 2 percent TDS under Section 194-IB once a year.
Yes, if you actually pay it, they own the house, and they report it as rental income in their return. Rent to a spouse is generally not accepted. Keep bank transfers and rent receipts.
Claim Section 80GG instead: the least of ₹5,000 a month, 25 percent of total income, and rent minus 10 percent of income, provided you or your family own no house where you live or work. Old regime only.
Rule checked on 25 September 2026. The Income-tax Act, 2025 continues the exemption on the same terms from 1 April 2026. General information, not tax advice.