Prepared by: FreeBytes Editorial Team · Reviewed by: FreeBytes Research Team
Methodology: We cross-check formulas, slabs, and examples against published government, regulator, lender, and scheme documentation before updating the page.
Calculations use the latest available Indian tax slabs, interest rates, and government rules. This tool is for informational purposes only and does not constitute financial or tax advice. Consult a qualified Chartered Accountant or financial advisor for decisions specific to your situation.
HRA Exemption Calculator
Calculate your House Rent Allowance (HRA) tax exemption under Section 10(13A) of the Income Tax Act for FY 2024-25. Find out how much HRA is tax-free and how much is taxable.
Calculate Your HRA Tax Exemption
Enter your salary details and rent paid to calculate HRA exemption. The tool uses the official Income Tax Act formula.
How is HRA Exemption Calculated?
Under Section 10(13A) of the Income Tax Act, HRA exemption is the minimum of these three amounts:
- Actual HRA received from employer
- 50% of Basic Salary (for Metro cities: Mumbai, Delhi, Chennai, Kolkata) or 40% of Basic Salary (for Non-Metro cities)
- Actual Rent Paid minus 10% of Basic Salary
Important Rules for HRA Exemption
- You must actually be paying rent — HRA exemption is NIL if you live in your own house
- If annual rent exceeds ₹1,00,000, landlord's PAN is mandatory
- Rent receipts are required as proof
- You cannot claim HRA exemption under the New Tax Regime (FY 2024-25)
- HRA exemption is only available under the Old Tax Regime
- Rent paid to parents is allowed — ensure proper rent agreement
HRA for New Tax Regime (FY 2024-25)
If you opt for the New Tax Regime, HRA exemption under Section 10(13A) is not available. The entire HRA received will be taxable. However, the new regime has lower tax rates which may still result in lower overall tax depending on your income.
Metro Cities for HRA Purpose
Only 4 cities are classified as Metro for HRA purposes: Mumbai, Delhi, Chennai, and Kolkata. All other cities including Bengaluru, Hyderabad, Pune, Ahmedabad are considered Non-Metro (40% rule applies).
Worked Example
Suppose you live in Delhi (a metro) with a basic salary of ₹50,000 per month, receive HRA of ₹20,000, and pay rent of ₹18,000. The three figures are: (1) actual HRA = ₹20,000; (2) 50% of basic = ₹25,000; (3) rent minus 10% of basic = 18,000 − 5,000 = ₹13,000. The exemption is the lowest of these, so ₹13,000 per month (₹1,56,000 a year) is tax-free, and the remaining ₹7,000 of monthly HRA is taxable. Notice that because the third figure is usually the smallest, your actual rent has the biggest impact on how much HRA you can exempt.
Tips to Maximise Your HRA Exemption
- Keep rent receipts and the rent agreement: These are mandatory proof, especially if your employer asks during proof submission.
- Furnish the landlord's PAN if annual rent exceeds ₹1,00,000 — without it the exemption can be denied.
- Paying rent to parents is valid: Transfer rent to their bank account and have a proper agreement; they must declare it as income.
- Claim HRA and home loan together only when genuinely applicable — for example, renting in your work city while owning a home elsewhere.
Frequently Asked Questions — HRA Calculator
The HRA exemption under Section 10(13A) is the minimum of three values: (1) actual HRA received from employer, (2) actual annual rent paid minus 10% of basic salary, and (3) 50% of basic salary for metro cities or 40% for non-metro cities. Only the lowest of the three is exempt from tax.
Only four cities qualify as Metro under the Income Tax Act for HRA: Mumbai, Delhi, Chennai, and Kolkata. These cities get the 50% of basic salary rule. All other cities — including Bengaluru, Hyderabad, Pune, and Ahmedabad — are Non-Metro and qualify for only 40% of basic salary.
Yes — paying rent to parents is a legitimate and commonly used tax-saving strategy. Ensure you have a formal rent agreement and make payments via bank transfer. Your parents must declare the rent as income in their ITR. This is especially effective if they are in a lower tax bracket or have no other taxable income.
No. HRA exemption under Section 10(13A) is not available under the New Tax Regime (default from FY 2023-24). The entire HRA received becomes fully taxable. If you pay significant rent and claim other deductions like 80C, compare both regimes carefully — the old regime may still result in lower tax despite higher slab rates.
You need: monthly rent receipts, a valid rent agreement, and proof of payment (bank transfer preferred). If annual rent exceeds ₹1,00,000 (i.e., over ₹8,333/month), the landlord's PAN is mandatory. Submit these to your employer for TDS adjustment, or claim the exemption while filing your ITR.
Yes. You can claim HRA exemption (for rent paid in your work city) and home loan deductions under Section 24(b) and 80C (for a self-owned property in another city) simultaneously. This is common for employees who work in one city and own a home in another city that is not self-occupied.