HRA Exemption Calculator

An HRA exemption calculator finds the tax-exempt part of your House Rent Allowance under the old regime as the lowest of actual HRA, rent paid minus 10% of basic, and 50% (metro) or 40% (non-metro) of basic, and shows the exempt and taxable HRA.

HRA exemption is the smallest of three separate figures, not simply "HRA received is tax-free" — and most people have never seen all three laid out side by side to understand which one actually binds. It's one of the largest tax breaks available to salaried tenants under the old tax regime, and also one of the most confusing.

The three figures: the actual HRA your employer pays you, your annual rent minus 10% of your basic salary (rent below that 10% threshold gives zero exemption — the law assumes you'd pay some rent regardless of any allowance), and 50% of basic salary if you live in a metro (Delhi, Mumbai, Kolkata, Chennai) or 40% elsewhere. Whichever of the three is smallest is what you can claim exempt; the rest of your HRA becomes taxable income. This calculator computes and displays all three so you see exactly which constraint is binding for you.

Two situations trip people up. If you own your home (or live with parents rent-free) and don't pay rent, you can't claim any HRA exemption regardless of the allowance in your salary structure. And this exemption only applies under the old tax regime — the new regime (now the default) offers no HRA exemption at all, so factor that into your regime choice with the income tax calculator. Keep rent receipts and, for annual rent above ₹1 lakh, your landlord's PAN — your employer will ask for both to process the exemption.