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How to use the hra exemption calculator
- 1Enter your monthly basic salary plus DA, straight from the payslip.
- 2Enter the monthly HRA you receive and the monthly rent you actually pay.
- 3Choose metro or non-metro — only Delhi, Mumbai, Kolkata and Chennai count as metro.
- 4Read the exempt and taxable amounts; the highlighted limb is the one limiting you.
The least-of-three rule, visibly
Section 10(13A) exempts the least of three amounts: the HRA you actually received; rent paid minus 10% of basic+DA; and 50% of basic+DA in a metro (40% elsewhere). Most calculators hand you the final figure; this one shows all three limbs and highlights the smallest, because knowing which limb binds is what makes the number actionable.
If the binding limb is 'rent minus 10% of basic', your rent is low relative to salary — the exemption grows rupee-for-rupee with rent. If it is 'HRA received', your employer's salary structure is the constraint — more HRA in place of other allowances would help, where restructuring is on offer. If it is the 50/40% limb, you are already extracting close to the maximum the rule allows.
The metro list surprises people: only the four original metros count. Bengaluru, Hyderabad, Pune, Gurugram — all 40% cities for HRA purposes, whatever their rents suggest.
What the exemption needs behind it
The exemption rests on rent actually paid, and the paper trail is specific: rent receipts (monthly, signed), the landlord's PAN once annual rent crosses ₹1,00,000, and ideally payments that show in a bank or UPI trail. The Rent Receipt Generator linked below produces the receipt set employers ask for during proof season.
Rent paid to parents is legitimate when it is real — genuine payments, ideally an agreement, and the parent declaring the rent as income. Rent paid to a spouse sits on much shakier ground and has repeatedly failed at the tribunal stage. Living in your own house, or paying no rent, produces an exemption of zero regardless of what HRA the payslip shows.
No HRA component at all? The exemption above does not apply, but Section 80GG offers a smaller, condition-laden deduction for rent-payers without HRA — a path worth reading up if you are self-employed or your employer pays a consolidated salary.
The regime question, and using the number
The HRA exemption exists only in the old tax regime — switch to the new regime and it vanishes along with 80C. Since a metro tenant's HRA exemption is often the single largest deduction, it is frequently what decides the regime question. Take the annual exempt figure from this page, put it in the HRA field of the Income Tax Calculator, and the comparison prices your specific case.
Payroll teams compute the exemption month by month, so a mid-year rent change or a move between cities splits the year into periods — this calculator's single-set-of-inputs answer matches any period during which the numbers were constant. For a split year, run each period separately and add.
The exemption is claimed through your employer during proof season, or directly in the return if you missed the window — the entitlement does not lapse merely because the deadline at work did. What it does need, either way, is the rent evidence.
Frequently asked questions
Which cities count as metro for HRA?
Only Delhi, Mumbai, Kolkata and Chennai — the 50% limb applies there, 40% everywhere else. Bengaluru, Hyderabad, Pune and the NCR satellite cities are all 40% for this rule despite their rents.
Why is my exempt amount zero?
Almost always because rent does not exceed 10% of basic+DA — the second limb floors at zero and, being the least, takes the whole exemption with it. The exemption only begins once monthly rent crosses a tenth of your basic.
Can I claim HRA while paying rent to my parents?
Yes, if the arrangement is genuine: you actually live there, actually pay (traceably), keep receipts, and the parent declares the rent as income. Fabricated family rent is a well-known audit target.
Does HRA exemption exist in the new tax regime?
No — it is an old-regime benefit. If your exemption is large, it may be exactly what keeps the old regime cheaper for you; the Income Tax Calculator on this site compares both with your figure included.
Do I need the landlord's PAN?
Once annual rent exceeds ₹1,00,000, your employer requires the landlord's PAN (or a no-PAN declaration) to allow the exemption through payroll. Below that line, receipts alone suffice.
Is my salary data uploaded?
No. The three limbs are computed in your browser; nothing you type leaves the page.