HRA Exemption Calculator

House Rent Allowance is a salary component your employer pays specifically toward your rented accommodation. Under Section 10(13A) of the Income Tax Act, part of that HRA is exempt from tax - provided you actually pay rent and meet the conditions. The exemption applies only under the Old Tax Regime; if you've opted for the New Regime, HRA is fully taxable.

The exempt HRA is the minimum of these three amounts (computed annually):

• (a) Actual HRA received - you can't exempt more than you were paid.
• (b) Rent paid minus 10% of basic salary - the law assumes a baseline 10% of basic would have gone to housing anyway, so only the excess is exempt.
• (c) 50% of basic salary (metro) or 40% (non-metro) - a hard cap relative to your salary, irrespective of actual rent.

Exempt HRA = MIN(a, b, c)

For HRA purposes, only Delhi, Mumbai, Kolkata, and Chennai qualify as metro cities - and these get the higher 50% cap. Every other city, including Bengaluru, Hyderabad, Pune, Ahmedabad, Gurgaon, Noida and Hyderabad, is treated as non-metro and gets only 40%. This classification is statutory and hasn't been updated to reflect the modern economic landscape - but the rule is what it is.

The Income Tax Act technically requires HRA exemption to be computed month-by-month - useful when rent, salary or city changes mid-year. This calculator annualises everything for clarity, which matches how the figure ultimately appears on your Form 16. If your inputs are stable through the year, the two approaches produce identical results.

• Rent receipts from your landlord (for each month / quarter).
• Rental agreement in your name.
• Landlord's PAN - mandatory if annual rent exceeds ₹1,00,000.
• Bank statements showing rent transfers (if paid via NEFT/UPI rather than cash).