HRA Calculator (2026): House Rent Allowance Exemption

Optimize your tax savings on House Rent Allowance (Section 10(13A))

Important Notice: HRA exemption is available only if you choose the Old Tax Regime. Under the New Tax Regime (default for FY 2025-26), most exemptions including HRA have been removed. Use our Income Tax Calculator to compare both regimes before deciding.

The HRA Exemption Calculator helps salaried individuals determine the exact portion of their House Rent Allowance that is non-taxable under Section 10(13A). For many employees, rent is the single largest expense, and the Indian government allows significant tax savings on this amount. Our tool uses the latest city classifications and salary definitions to ensure your tax declarations are 100% compliant with the Income Tax Department's guidelines.

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Estimated HRA Exemption

₹75,000

Amount deducted from your taxable income

Taxable HRA

₹2,25,000

This portion is added to your salary

Exemption Clause

Under Section 10(13A), your exemption is the lowest of the three statutory limits.

Mathematical Limits check

Condition 1

Actual HRA Received

₹3,00,000

Condition 2

50% of Basic + DA

₹75,000

Exempted Amount

Condition 3

Rent Paid - 10% of Salary

₹2,25,000

HRA Exemption Distribution

Housing Optimization

The Sweet Spot Rent Strategy.

To maximize HRA exemption, your annual rent should ideally be around 315,000 in a Metro city. This ensures you claim 100% of the HRA component tax-free.

Parent-Rent Path

Claim HRA while living with parents.

Landlord PAN Rule

Mandatory if rent > ₹1 Lakh/year.

What is HRA Exemption (Section 10(13A))?

House Rent Allowance (HRA) is a component offered by employers to help employees meet the cost of staying in a rented house. While the full HRA received is part of your Goss Salary, the IT Act allows you to deduct a specific portion of it from your taxable income. This deduction is only available to salaried individuals who live in rented accommodation and have an HRA component in their salary slip.

How is HRA Exemption Calculated?

The Income Tax Department uses a 'Least of the Following' rule. The calculator compares these three specific conditions and exempts the smallest amount:

  • 1. Actual HRA Received: The exact amount labeled as HRA in your CTC breakdown.
  • 2. Rent Paid minus 10% of Salary: Total annual rent paid minus 10% of your (Basic + DA).
  • 3. 50% or 40% of Salary: 50% of your (Basic + DA) if you live in a Metro city (Delhi, Mumbai, Kolkata, Chennai), or 40% for any other city in India.

Metro vs Non-Metro HRA Rates

The city you reside in significantly impacts your tax saving potential. The Income Tax Act categorizes cities into two groups for HRA purposes:

  • Metro Cities: Delhi, Mumbai, Kolkata, and Chennai. Residents here are eligible for an exemption up to **50%** of their Basic Salary.
  • Non-Metro Cities: All other cities (including Bengaluru, Pune, Hyderabad, Gurgaon) are capped at **40%** of Basic Salary.

HRA Exemption Example with Real Numbers

Suppose Arvind works in Bengaluru (Non-Metro) with a Basic Salary of ₹50,000, receives ₹20,000 as HRA, and pays ₹18,000 as monthly rent.

  • Condition 1: Actual HRA = ₹20,000
  • Condition 2: Rent (₹18k) - 10% Basic (₹5k) = ₹13,000
  • Condition 3: 40% of Basic = ₹20,000
  • Result: Arvind's Monthly Exemption is **₹13,000** (the lowest of the three).

Can You Claim HRA and Home Loan Both?

Yes, this is a common misconception! You can claim both HRA and Home Loan tax benefits simultaneously if:

  • You own a house but live in a rented house in the same or a different city (due to work or other valid reasons).
  • You are paying rent for the house you live in and EMIs for a house you own. HRA is claimed under Section 10(13A), while Home Loan interest is claimed under Section 24(b) and principal under Section 80C.

Frequently Asked Questions

⚠️ Disclaimer

The figures provided by this calculator are estimates based on the inputs you provide and standard financial formulas. STOCKCALC.IN does not offer investment advice. Please consult a qualified financial advisor before making any investment decisions.

MH

Verified Contributor

HRA Calculator (2026): House Rent Allowance Exemption analyzed by Mahavir Hirani

I verified this calculation against the **April 2026 Fiscal Cycle**. If you have questions about the logic, reach out via the Author Page.

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