What is HRA exemption?

HRA (House Rent Allowance) exemption allows salaried employees to reduce their taxable income by the amount of HRA that qualifies for exemption. It is available only under the old tax regime.

How is HRA exemption calculated?

HRA exemption = minimum of: (1) Actual HRA received, (2) Rent paid minus 10% of basic salary, (3) 50% of basic salary for metro cities or 40% for non-metro cities.

Which cities are considered metro for HRA?

For FY 2025-26 and earlier, four cities are metro for HRA — Delhi, Mumbai, Chennai, and Kolkata — where 50% of basic salary applies in condition 3; all other cities get 40%. From FY 2026-27, the Income Tax Rules 2026 (notified 20 March 2026) expand this to 8 cities, adding Bengaluru, Hyderabad, Pune, and Ahmedabad at 50%.

Is HRA available under the new tax regime?

No. HRA exemption is only available under the old tax regime. Under the new regime, the entire HRA received is taxable as part of salary income.

Free HRA Exemption Calculator FY 2025-26 & 2026-27 | RushTax | RushTax

The 3 Conditions

Actual HRA received
Rent paid − 10% of basic
50%/40% of basic salary

Exemption = minimum of all 3

Metro vs Non-Metro

FY ≤2025-26 metro (4): Delhi, Mumbai, Chennai, Kolkata — 50%

FY 2026-27 (8 cities): + Bengaluru, Hyderabad, Pune, Ahmedabad

All other cities: 40% of basic

Old Regime Only

HRA exemption is not available under the new tax regime. Under new regime, full HRA is taxable.

HRA exemption is available only under the old tax regime. Actual exemption may vary based on the period of rent payment, PAN of landlord (if rent exceeds ₹1L/year), and employer's computation. This calculator provides an estimate — consult a tax professional for exact figures. RushTax is a freelance consulting service — not a CA firm.

Frequently Asked Questions

Ready to file?

I'll handle the filing for you. Message me on WhatsApp with your documents.

File My ITR with HRA Claim