HRA Calculator
Find out exactly how much of your House Rent Allowance is tax exempt.
Metro: Delhi, Mumbai, Kolkata, Chennai, Bangalore, Pune, Hyderabad, Ahmedabad
What Is HRA (House Rent Allowance)?
House Rent Allowance, commonly referred to as HRA, is a component of salary that employers pay to employees to help cover rental accommodation expenses. If you are a salaried individual in India, chances are your salary structure already includes an HRA component.
HRA serves two purposes. First, it is a part of your compensation. Second, and more importantly for tax planning, a portion of it can be claimed as a tax exemption under Section 10(13A) of the Income-tax Act, 1961. From Tax Year 2026-27, HRA is governed by Section 11 read with Schedule III, Table Sl. No. 11 and Rule 279 of the Income-tax Rules, 2026.
Section 10(13A) of the Income Tax Act.
HRA Calculation Formula
The HRA exemption under Section 10(13A) is calculated as the minimum (lowest) of the following three amounts:
1. Actual HRA received from the employer
This is simply the total HRA paid to you during the financial year (or the relevant period).
2. 50% of basic salary for metro cities, or 40% of basic salary for non-metro cities as per Tax Year 2026-27 update
If you live in Delhi, Mumbai, Kolkata, Chennai, Bangalore, Pune, Hyderabad, Ahmedabad, the applicable percentage is 50%. For all other cities, it is 40%. The “basic salary” here means basic pay plus Dearness Allowance (DA) that forms part of retirement benefits, if applicable. It does not include other allowances or perks.
3. Actual rent paid minus 10% of basic salary
Take the total rent you have paid during the year and subtract 10% of your basic salary from it. The result is the third figure in the formula.
The lowest of these three amounts is the HRA exemption you can claim. The remaining portion of HRA (total HRA received minus the exempt amount) becomes taxable and gets added to your income.
This is the standard hra calculation formula that the Income Tax Department follows, and it is exactly what this tool automates for you.
HRA Calculation Example
Let us walk through two realistic examples so the formula becomes crystal clear.
Example 1: Salaried Employee in Mumbai (Metro City)
Suppose Rohan works in Mumbai and has the following monthly salary details:
- Basic Salary: ₹50,000 per month
- HRA Received: ₹20,000 per month
- Actual Rent Paid: ₹18,000 per month
Annual figures:
- Basic Salary: ₹50,000 x 12 = ₹6,00,000
- HRA Received: ₹20,000 x 12 = ₹2,40,000
- Rent Paid: ₹18,000 x 12 = ₹2,16,000
Now applying the formula:
- Component 1: Actual HRA received = ₹2,40,000
- Component 2: 50% of basic salary (metro city) = 50% of ₹6,00,000 = ₹3,00,000
- Component 3: Rent paid minus 10% of basic salary = ₹2,16,000 minus ₹60,000 = ₹1,56,000
Exempt HRA = Minimum of ₹2,40,000, ₹3,00,000, and ₹1,56,000 = ₹1,56,000
Rohan can claim ₹1,56,000 as HRA exemption. The remaining ₹84,000 (₹2,40,000 minus ₹1,56,000) is taxable.
Example 2: Salaried Employee in Jaipur (Non-Metro City)
Priya works in Jaipur and has these monthly figures:
- Basic Salary: ₹35,000 per month
- HRA Received: ₹14,000 per month
- Actual Rent Paid: ₹12,000 per month
Annual figures:
- Basic Salary: ₹35,000 x 12 = ₹4,20,000
- HRA Received: ₹14,000 x 12 = ₹1,68,000
- Rent Paid: ₹12,000 x 12 = ₹1,44,000
Applying the formula:
- Component 1: Actual HRA received = ₹1,68,000
- Component 2: 40% of basic salary (non-metro) = 40% of ₹4,20,000 = ₹1,68,000
- Component 3: Rent paid minus 10% of basic salary = ₹1,44,000 minus ₹42,000 = ₹1,02,000
Exempt HRA = Minimum of ₹1,68,000, ₹1,68,000, and ₹1,02,000 = ₹1,02,000
Priya can claim ₹1,02,000 as exempt. Her taxable HRA is ₹66,000 (₹1,68,000 minus ₹1,02,000).
In both these hra calculation examples, Component 3 turned out to be the lowest. That is common when rent is relatively modest compared to basic salary. But if someone pays very high rent, Component 1 or Component 2 could become the limiting factor.
How to Use This HRA Calculator
- Start by selecting your Tax Regime from the dropdown. Choose “Old Regime” if you plan to claim HRA exemption. If you select “New Regime,” the tool will show you that HRA exemption is not available and the entire HRA becomes taxable.
- Select your City Type from the second dropdown. Pick “Metro: Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad, Bengaluru” if your rented house is in one of these four cities. For all other cities, select “Other City / Non-metro.” This determines whether 50% or 40% of salary is used in the formula.
- Review the checkboxes. “HRA is part of salary” and “Living in a rented house and paying rent” should both be ticked for a standard HRA calculation. If you own the house you live in, tick the “Living in own house / no actual rent paid” box and the tool will correctly show zero exemption. If your annual rent exceeds ₹1,00,000, tick the “Landlord PAN available” checkbox to reflect your documentation status.
- Under Salary Components, enter your monthly Basic Salary. If your Dearness Allowance forms part of retirement benefits (used for PF and gratuity), enter that amount in the DA forming retirement benefits field. If you receive a turnover based commission, enter that as well. Leave DA and Commission as zero if they do not apply to you.
- Under HRA & Rent, enter the monthly HRA Received from your employer (as shown on your salary slip), the monthly Rent Paid for your accommodation, and the number of Eligible Months (1 to 12) for which you received HRA and paid rent during the financial year.
- The Other Taxable Salary and Notes / Landlord Name fields are optional. Use them if you want to see the full salary impact or keep a record of your landlord details for printing.
- Click the Calculate HRA button.
- The Result Dashboard on the right will instantly show three figures: HRA Exempt (in green), Taxable HRA (in red), and Annual Rent. Below that, the Rule 2A Working table breaks down all three formula components and highlights which one is the lowest (limiting factor). The Salary Impact section shows how the exemption affects your gross and taxable salary, and the Documents Checklist reminds you what proofs you need.
- Use the Reset button to clear all fields and start over, or the Print / Save PDF button to save a copy of your results for your records or to share with your CA.
HRA Tax Calculation: What Gets Taxed and What Does Not
A common misconception is that HRA received from the employer is fully tax free. It is not. Only the exempt portion, calculated using the formula above, escapes income tax. The rest is fully taxable.
Let us take Rohan’s case from the example above. He receives ₹2,40,000 as HRA in a year. His exempt HRA is ₹1,56,000. The taxable HRA is ₹84,000. This ₹84,000 gets added to his salary income and is taxed at his applicable slab rate.
Here is a simple side by side view:
| Component | Amount (₹) |
| Total HRA Received | 2,40,000 |
| Exempt HRA (under Section 10(13A)) | 1,56,000 |
| Taxable HRA (added to salary income) | 84,000 |
Who Should Use This HRA Calculator?
This tool is built for a wide range of users:
- Salaried employees who receive HRA as part of their salary and want to know how much of it is tax exempt.
- Individuals filing their income tax returns who need the exact exempt and taxable breakup. People comparing the old and new tax regimes to decide which one saves more tax.
- HR professionals and payroll managers who design salary structures and need quick HRA calculations.
- Chartered Accountants and tax consultants who advise clients on salary tax planning.
- Freshers looking at their first offer letter or CTC breakup and trying to understand what HRA means and how it affects their take home pay.
Documents Required to Claim HRA Exemption
Calculating HRA exemption is one thing. Actually claiming it requires proper documentation. Here is what you need:
- Rent Receipts:
These are the most basic proof. Each receipt should have the month, amount paid, landlord name, address of the rented property, and a revenue stamp if the monthly rent exceeds ₹5,000 (in cash payments). Collect them monthly. Do not wait until January to chase your landlord. - Rental Agreement:
A registered or notarized rent agreement strengthens your claim. Most employers ask for it during the investment declaration or proof submission window. It should mention the rent amount, tenure, and details of both tenant and landlord. - Landlord PAN:
If your total annual rent exceeds ₹1,00,000, you are required to provide your landlord’s Permanent Account Number (PAN) to your employer. Many employees forget this and face trouble during proof submission. Ask for it at the time of signing the rent agreement itself. - Bank Statements:
Paying rent through bank transfer (UPI, NEFT, or cheque) creates a clear trail. This is not always mandatory, but it adds credibility, especially if the rent is high or the arrangement involves a family member as landlord.
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Frequently Asked Questions (FAQ)
What is HRA and who is eligible to receive it?
HRA stands for House Rent Allowance. It is a salary component paid by employers to help employees cover rental expenses. Any salaried individual whose salary structure includes an HRA component is eligible to receive it. The exemption under Section 10(13A) can be claimed by those who actually pay rent for their accommodation.
