HRA Exemption Calculator 2026 — Formula with Worked Example
House Rent Allowance is one of the most valuable salary exemptions — but only in the old regime, and only if you compute it correctly. The exemption is the least of three numbers.
Quick Answer
Under Section 10(13A), the HRA exemption is the lowest of: (1) actual HRA received, (2) rent paid minus 10% of basic salary, and (3) 50% of basic (metro) or 40% of basic (non-metro). A calculator finds the least of the three instantly. HRA exemption is available only under the old tax regime.
✓Key Takeaways
- HRA exemption = least of three values under Section 10(13A).
- Metro cities allow 50% of basic; non-metro allow 40%.
- It applies only in the old regime — the new regime does not allow it.
- Rent above ₹1,00,000/year requires the landlord's PAN.
The three-part formula
The exempt HRA is the minimum of:
- Actual HRA received from your employer
- Rent paid − 10% of basic salary (basic + DA)
- 50% of basic if you live in a metro, else 40% of basic
"Metro" means Delhi, Mumbai, Kolkata, or Chennai.
Worked example
Assume: Basic salary ₹6,00,000/year, HRA received ₹2,40,000, rent paid ₹3,00,000, living in Mumbai (metro).
| Step | Calculation | Value |
|---|---|---|
| 1. Actual HRA | — | ₹2,40,000 |
| 2. Rent − 10% basic | 3,00,000 − 60,000 | ₹2,40,000 |
| 3. 50% of basic (metro) | 50% × 6,00,000 | ₹3,00,000 |
| Exemption (least) | min(2.4L, 2.4L, 3L) | ₹2,40,000 |
So ₹2,40,000 is exempt, and the balance of HRA (if any) is taxable.
What you need to claim it
- Rent receipts or a rent agreement.
- The landlord's PAN if your annual rent exceeds ₹1,00,000.
- Proof of payment (bank transfer preferred over cash).
Can you claim HRA and a home loan together?
Yes — if, for example, you rent in your work city while owning a home elsewhere (or a let-out property). You can claim the HRA exemption and the home loan interest deduction simultaneously, provided the facts genuinely support both.
Frequently Asked Questions
Can I claim HRA if I pay rent to my parents?
Yes, if you genuinely pay rent to a parent who owns the home and declares it as income. Keep proof — bank transfers and a rent agreement.
Is HRA available in the new regime?
No. The HRA exemption is an old-regime benefit only.
What if I don't receive HRA but pay rent?
You may claim a deduction under Section 80GG instead, subject to its own limits.
Use our HRA calculator to find your exemption in seconds, or let us file your ITR with HRA optimised.
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