HRA Exemption Calculator
How much of your House Rent Allowance is actually tax-free under Section 10(13A) — the three-way minimum, and why metro status changes the answer.
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House Rent Allowance is not automatically tax-free. Section 10(13A) exempts the least of three figures, and which one binds decides how much of your HRA you actually keep.
The three limits
- The HRA you actually received
- Rent paid, minus 10% of basic salary
- 50% of basic if you live in a metro; 40% if you do not
Your exemption is the smallest of the three. Everything above it is added back to taxable salary.
Worked example. Basic ₹6,00,000, HRA received ₹3,00,000, rent paid ₹3,60,000, living in Bengaluru.
| Limit | Amount |
|---|---|
| HRA received | ₹3,00,000 |
| Rent − 10% of basic (₹3,60,000 − ₹60,000) | ₹3,00,000 |
| 40% of basic (non-metro) | ₹2,40,000 |
The exemption is ₹2,40,000, and ₹60,000 of HRA stays taxable — because Bengaluru is not a metro for this purpose.
Move the same person to Delhi and the third limit becomes 50% of basic, or ₹3,00,000. The exemption rises to ₹3,00,000 and nothing is taxable. Same salary, same rent, ₹60,000 difference in taxable income.
"Metro" means exactly four cities
For Section 10(13A), the metros are Delhi, Mumbai, Kolkata and Chennai. That is the complete list.
Bengaluru, Hyderabad, Pune, Ahmedabad and Gurugram are non-metro for HRA purposes, regardless of how expensive they are or what any other law says. This is the single most common error in self-computed HRA, and it consistently overstates the exemption by 10% of basic.
The rules people trip over
PAN of the landlord. If your annual rent exceeds ₹1,00,000, you must report the landlord's PAN to your employer. Without it the exemption is generally disallowed at the TDS stage, and you would have to claim it at filing with the risk of a query.
Paying rent to a parent works — with conditions. The arrangement must be genuine: your parent must actually own the property, there should be a rent agreement, the money must be transferred by bank rather than handed over in cash, and your parent must declare the rent as income in their own return. Done properly this is legitimate tax planning. Done as a paper arrangement it is the kind of claim that attracts scrutiny.
You cannot claim HRA on a property you own and live in. You can claim both HRA and a home loan deduction if you rent in one city and have a let-out or under-construction property elsewhere, but not for a self-occupied home in the same city you claim rent for.
No HRA under the new regime. This is the big one. The new tax regime removes the HRA exemption entirely. If you are on the new regime, this calculator tells you what you are giving up, not what you can claim — run the old vs new regime comparison before deciding.
If you receive no HRA
Section 80GG allows a deduction for rent paid when your salary includes no HRA component — limited to the least of ₹5,000 a month, 25% of total income, or rent minus 10% of total income. It is a far smaller relief, and it too is unavailable under the new regime.
HRA Exemption — frequently asked questions
How is HRA exemption calculated?
It is the least of three figures: the HRA you actually received; rent paid minus 10% of basic salary; and 50% of basic if you live in a metro or 40% if you do not. On basic ₹6,00,000, HRA ₹3,00,000 and rent ₹3,60,000 in a non-metro, the three come to ₹3,00,000, ₹3,00,000 and ₹2,40,000 — so ₹2,40,000 is exempt and ₹60,000 stays taxable.
Is Bengaluru a metro for HRA purposes?
No. For Section 10(13A) the metros are exactly four cities: Delhi, Mumbai, Kolkata and Chennai. Bengaluru, Hyderabad, Pune, Gurugram and Ahmedabad are non-metro, so the third limit is 40% of basic rather than 50%. Treating Bengaluru as a metro is the most common error in self-computed HRA and overstates the exemption by 10% of basic.
Can I claim HRA if I pay rent to my parents?
Yes, if the arrangement is genuine. Your parent must actually own the property, there should be a rent agreement, rent should move by bank transfer rather than cash, and your parent must declare it as rental income in their own return. Done properly it is legitimate. Done as a paper arrangement with no money actually changing hands, it is the kind of claim that draws a notice.
Do I need my landlord’s PAN?
If your annual rent exceeds ₹1,00,000, yes — you must report the landlord’s PAN to your employer. Without it, employers generally disallow the exemption when computing TDS, leaving you to claim it at filing and defend it if queried. Ask for the PAN before you sign the lease rather than in March.
Can I claim HRA and a home loan deduction together?
Yes, in the right circumstances. If you rent in the city you work in and own a property elsewhere that is let out or still under construction, both claims can stand. What you cannot do is claim HRA for rent while also treating a property in the same city as self-occupied. The two claims must describe a situation that is actually possible.
Is HRA exemption available under the new tax regime?
No. The new regime removes the HRA exemption along with 80C, 80D and most other deductions. For someone paying substantial rent in a metro, the lost HRA exemption is often the single largest reason the old regime still wins — which is exactly what the break-even calculation in the old vs new regime calculator is designed to surface.
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Results from this calculator are estimates for informational use only — not financial, medical, or professional advice. Read our full disclaimer before acting on any number you see here.