HRA Exemption Calculator — How Much of Your House Rent Allowance Is Tax-free

How to use the HRA calculator

1. Enter your Basic salary + DA (per month).
2. Enter the HRA received (per month) shown on your payslip.
3. Enter the Rent paid (per month) for the home you live in.
4. Choose the City of the rented home: one of the eight 50% cities, or any other place (40%).
5. Set Months of rent in the year if you rented for less than 12 months.
6. Read your exempt and taxable HRA. The table shows the three limits and marks the lowest one, which sets your exemption.

What it does and when to use it

House rent allowance is part of many salaries in India. It is taxable, but if you rent your home and use the old regime, part or all of it can be exempt. The exempt amount is not simply your rent. It is the lowest of three limits, and the one that bites depends on how your rent, your HRA and your basic pay compare.

Use the calculator to:

• Fill in your investment declaration at work, so your employer deducts the right tax.
• Choose a tax regime: the HRA exemption is often the biggest reason the old regime can still win.
• Plan a move, by seeing how a different rent or city changes your exemption.
• Check your Form 16, if the exempt figure looks wrong.

Once you have your exempt amount, add it to the deductions in the Income Tax Calculator or the regime comparison. If you are deciding between job offers, the CTC to In-hand Salary Calculator shows your pay under the new regime, where HRA is fully taxed.

The rule: rule 279 of the Income-tax Rules 2026

The Income-tax Rules 2026 were notified on 20 March 2026 for the new Income-tax Act 2025. Rule 279 sets the HRA exemption as the least of:

1. The HRA you actually received for the period.
2. Rent paid minus 10% of salary for the period.
3. 50% of salary if the home is in Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad or Bengaluru, or 40% of salary anywhere else.

Here “salary” means basic pay plus dearness allowance, where the DA is part of your terms of employment. Other allowances and perquisites do not count.

The list of 50% cities grew from four to eight under the 2026 rules. If you rent in Hyderabad, Pune, Ahmedabad or Bengaluru, your limit is now higher than many older articles say.

How it works

The calculator multiplies each monthly figure by the number of months you enter, then works out:

• A = HRA received × months
• B = (rent × months) − 10% of (salary × months), or zero if that is negative
• C = 50% or 40% of (salary × months)
• Exempt HRA = the smallest of A, B and C
• Taxable HRA = A − exempt HRA

It also shows the exempt amount per month. All of this runs in your browser.

Worked examples

All results are from the calculator.

1. Rent of ₹25,000 in Bengaluru. Basic ₹50,000 and HRA ₹20,000 a month. Over 12 months: HRA received ₹2,40,000; rent minus 10% of salary ₹3,00,000 − ₹60,000 = ₹2,40,000; 50% of salary ₹3,00,000. The lowest is ₹2,40,000, so Exempt HRA: ₹2,40,000.00 and none of the HRA is taxed.

2. Rent of ₹15,000 in a smaller city. Same salary and HRA, 40% limit. Rent minus 10% of salary is ₹1,80,000 − ₹60,000 = ₹1,20,000, the lowest limit. Exempt HRA is ₹1,20,000 and Taxable HRA: ₹1,20,000.00. Here a higher rent would raise the exemption, up to the ₹2,40,000 of HRA.

3. Rent of ₹35,000 in Pune. Basic ₹60,000, HRA ₹30,000 a month. HRA received is ₹3,60,000 and 50% of salary is also ₹3,60,000, but rent minus 10% of salary is ₹4,20,000 − ₹72,000 = ₹3,48,000. So Exempt HRA: ₹3,48,000.00 and ₹12,000 is taxable. Before the 2026 rules, Pune was not on the list, so the cap would have been 40% of salary, ₹2,88,000.

4. The same person renting for only 8 months, outside the eight cities. Over 8 months the salary is ₹4,80,000. HRA received is ₹2,40,000; rent minus 10% of salary is ₹2,80,000 − ₹48,000 = ₹2,32,000; 40% of salary is ₹1,92,000. The lowest is the 40% limit: Exempt HRA: ₹1,92,000.00.

5. Very low rent. Basic ₹40,000, HRA ₹15,000, rent ₹3,000 a month. Ten per cent of salary is ₹4,000 a month, more than the rent, so the second limit is zero and Exempt HRA: ₹0.00.

Which limit usually decides it?

• Rent minus 10% of salary is the limit when rent is modest compared with your HRA. Each extra rupee of rent then adds a rupee of exemption, until another limit takes over.
• HRA received is the limit when your rent is high. Paying more rent does not help once you reach it.
• The 50% or 40% cap matters when your HRA is a large share of a small basic pay, or when you live outside the eight cities.

A quick check: your whole HRA is exempt when rent is at least HRA + 10% of salary, and HRA is no more than 50% (or 40%) of salary.

Limits and tips

• Old regime only. In the new regime HRA is fully taxable, whatever rent you pay.
• One rate of pay for the period. If your basic, HRA or rent changed during the year, run the calculator once for each stretch of months and add the exempt amounts.
• Where you rent, not where you work. Choose the city of the home.
• Proof matters. The exemption depends on rent you actually pay. Keep receipts and the rent agreement, and give your employer what it asks for.
• Not covered: rules for people who own a home in the same city, rent paid to family members, and cases where you pay rent but get no HRA from your employer. Check these with a tax adviser.
• This is not the whole tax picture. HRA is one item. Put the exempt figure into the Income Tax Calculator to see the tax you will actually pay.