HRA Exemption Calculator
Calculate your HRA exemption under Section 10(13A): the least of actual HRA, rent minus 10% of salary, and 50% or 40% of salary.
House Rent Allowance is exempt under Section 10(13A) to the extent of the least of three amounts: the actual HRA received, rent paid minus 10% of salary, and 50% of salary in the metros (Delhi, Mumbai, Kolkata, Chennai) or 40% elsewhere.
"Salary" here means basic pay plus dearness allowance and any commission on turnover — not your full CTC. And as with home loan relief, HRA exemption is only available under the old tax regime.
The three-rule test
Exemption = the least of:
1. Actual HRA received
2. Rent paid − 10% of (basic + DA)
3. 50% of (basic + DA) in metros, 40% elsewhere
A worked example
Basic ₹60,000/month, HRA ₹30,000/month, rent ₹25,000/month, Mumbai. Annual salary ₹7,20,000, HRA ₹3,60,000, rent ₹3,00,000. Rule 1 = ₹3,60,000. Rule 2 = ₹3,00,000 − ₹72,000 = ₹2,28,000. Rule 3 = ₹3,60,000. The least is ₹2,28,000, saving about ₹71,136 at the 30% slab with cess.
Rules to keep you safe
- Rent above ₹1,00,000 a year requires the landlord's PAN in your declaration to the employer.
- You can claim HRA and a home loan together — if you genuinely rent in one city and own a let-out or under-construction property elsewhere. Claiming rent for a house you live in and own is not permitted.
- Paying rent to a parent is allowed where the arrangement is real: they must own the property, actually receive the rent, and declare it as income. Keep bank transfers, not cash.
- HRA exemption is not available under the new tax regime.
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Create your free property pageFrequently asked questions
Can I claim HRA under the new tax regime?
No. Section 10(13A) exemption is only available under the old regime. Under the new regime the entire HRA is taxable.
Do I need rent receipts?
Yes, for your employer, and the landlord’s PAN if annual rent exceeds ₹1,00,000. Bank transfers are far stronger evidence than cash receipts if the claim is ever questioned.
Can I pay rent to my parents and claim HRA?
Yes, provided they own the property, you genuinely pay the rent, and they declare it as income in their return. Transfer the money by bank and keep an agreement.
Can I claim both HRA and home loan benefits?
Yes, when the situations are genuinely separate — for example you rent where you work and own a property elsewhere that is let out or under construction.
What counts as salary for HRA?
Basic pay plus dearness allowance if it forms part of retirement benefits, plus any commission based on a fixed percentage of turnover. Not the full CTC.
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