Skip to content
Toolore

Calculators

HRA Calculator

Enter your basic pay, the HRA you receive and the rent you pay. From tax year 2026-27, Bengaluru, Hyderabad, Pune and Ahmedabad join Mumbai, Delhi, Kolkata and Chennai in the 50% list, which raises the tax-free HRA for many people in those cities.

Enter your basic pay, HRA and rent to see how much HRA is tax-free.

How to use this tool

  1. Enter your monthly basic pay plus dearness allowance.
  2. Enter the HRA shown on your salary slip each month.
  3. Enter the rent you actually pay each month.
  4. Say whether you live in one of the eight cities with the 50% limit.
  5. Read the tax-free HRA. The limit highlighted in the breakdown is the one that decides it.

Formula and method

Exempt HRA = least of: HRA received · rent paid − 10% of salary · 50% or 40% of salary
salary
— basic pay plus dearness allowance, for the period you rented
50%
— Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad
40%
— every other city

Whichever of the three is smallest is exempt; the rest of your HRA is taxed as salary. Knowing which limit binds tells you whether paying more rent would change anything.

Worked examples

Bengaluru: ₹50,000 basic, ₹20,000 HRA, ₹22,000 rent a month

  1. HRA received: 20,000 × 12 = ₹2,40,000
  2. Rent − 10% of salary: 2,64,000 − 60,000 = ₹2,04,000
  3. 50% of salary: 50% of 6,00,000 = ₹3,00,000

₹2,04,000 is tax-free and ₹36,000 of HRA is taxable. Rent is the limit that binds.

The same figures in a 40% city

  1. 40% of salary: ₹2,40,000 — still above ₹2,04,000

No change: ₹2,04,000 is tax-free, because rent is still the smallest limit.

Notes and limitations

  • HRA exemption is available only under the old tax regime. Under the new regime, which is the default, all HRA is taxable.
  • The four cities were added by the Income-tax Rules, 2026, from tax year 2026-27. For income earned before 1 April 2026, only the original four metros qualify for 50%.
  • If your annual rent is more than ₹1 lakh, your employer will ask for the landlord's PAN. Declarations to the employer are made on Form 124, which replaced Form 12BB.
  • Rent paid to a parent can qualify if it is genuinely paid and the parent declares it as income; rent paid to a spouse is generally not accepted.

Frequently asked questions

Which cities get the 50% HRA exemption?

From tax year 2026-27: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. All other cities use 40%.

Can I claim HRA under the new tax regime?

No. The new regime does not allow the HRA exemption. Use the income tax calculator to see whether the old regime, with HRA and your other deductions, comes out lower.

What if I do not pay rent?

Then none of the HRA is exempt: the “rent paid minus 10% of salary” limit is zero, and the exemption is the smallest of the three limits.

Why is my exemption less than my HRA?

Because one of the other two limits is lower. Most often it is rent minus 10% of salary — the exemption only covers rent above a tenth of your basic pay.

Related tools