Eternexa

HRA Exemption Calculator

See exactly how much of your House Rent Allowance escapes tax — the least-of-three rule, metro vs non-metro, worked out live.

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Your rent and salary

₹50,000

Basic salary + dearness allowance — not your full CTC

₹20,000
₹18,000

City type

Only Delhi, Mumbai, Kolkata, Chennai count as metros (50% of Basic+DA).

HRA exempt from tax
₹13,000/mo

₹1.56 Lakh a year escapes tax · ₹7,000/mo stays taxable

65%of your HRA escapes tax
Exempt a year
₹1.56 Lakh
Taxable a month
₹7,000
Of HRA received
65%
  • Exempt from tax
  • Stays taxable
The HRA exemption exists in the old tax regime only — the new (default) regime taxes your entire HRA. Weigh which regime wins overall with the income-tax calculator.

The least of three

Rule 2A tests three figures and gives you the smallest. The shortest bar is the one that decides your exemption.

(a) Actual HRA received
₹20,000/mo
(b) Rent − 10% of Basic+DA — the least, so it binds
₹13,000/mo
(c) 50% of Basic+DA
₹25,000/mo
= Exempt HRA
₹13,000/mothe least of the three

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Calculation method & official sources

Old-regime estimate using the least of rent less the salary-linked threshold, HRA received and the metro/non-metro salary limit. Enter the eligible salary basis, not CTC. This does not determine your complete tax liability.

Eternexa is an independent app. It is not affiliated with, endorsed by, authorised by or representing the Government of India, any state government or any government entity. It does not provide official government services.

Results are estimates for general information, not financial, investment, tax or legal advice. Verify the applicable period, eligibility and official rules before acting.

All official sources & calculator methods →

What is the HRA exemption?

House Rent Allowance can qualify for an exemption under the old tax regime when the applicable conditions are met. This calculator estimates the exempt and taxable portions from the salary, rent and HRA you enter. It does not determine your eligibility or your complete tax liability.

The least-of-three rule

Your exempt HRA is the least of these three amounts:

  • (a) the HRA you actually received
  • (b) rent paid minus 10% of Basic + DA
  • (c) 50% of Basic + DA in a metro, 40% elsewhere

“Salary” here means Basic plus dearness allowance (plus turnover-based commission, for the few who earn it) — never the full CTC.

Worked example: Basic + DA ₹30,000/month, HRA ₹13,000, rent ₹10,000 in a non-metro. The three limbs: (a) ₹13,000 · (b) 10,000 − 3,000 = ₹7,000 · (c) ₹12,000. The least is ₹7,000/month — ₹84,000 a year off your taxable income, while the remaining ₹6,000/month of HRA stays taxable.

Metro means exactly four cities

Only Delhi, Mumbai, Kolkata and Chennai qualify for the 50% limb. Bengaluru, Hyderabad, Pune, Noida and Gurgaon — whatever their rents — are 40% cities in the eyes of Rule 2A, a list unchanged for decades. (Living in an NCR suburb but working in Delhi? What matters is where the rented house is.)

Old regime only — check before you celebrate

The HRA exemption belongs to the old tax regime. The new regime — the default since FY 2023-24 and the one most filers now use — taxes HRA fully, trading exemptions for lower slab rates. So the real question is not “how much HRA can I exempt?” but “does the old regime, with my HRA plus other deductions, beat the new one?” Feed the exempt amount from this page into the old-vs-new comparison, and see where your take-home actually lands.

Check your records and eligibility

Keep evidence of rent paid and ask your employer which documents are required. Rent-related TDS, landlord identification and other deductions are separate questions that this calculator does not assess. Check the Income Tax Department references for the relevant tax year. If salary, rent or city changes during the year, estimate each period separately.

Frequently asked questions

Does this calculator decide whether a family rent arrangement qualifies?
No. It applies the formula to your inputs. Whether a particular arrangement qualifies depends on the facts, evidence and applicable tax provisions. Confirm with official guidance or a qualified professional.
Does the new tax regime allow HRA exemption?
No. The new (default) regime taxes HRA fully — the exemption exists only if you opt for the old regime. Whether that trade is worth it depends on your total deductions; compare both regimes with your real numbers before choosing.
Does the estimate include rent-related TDS or document checks?
No. Ask your employer about supporting documents and check current Income Tax Department guidance for any separate reporting or TDS obligations. The result is an exemption estimate only.
What if rent or salary changes during the year?
Calculate each period with its own eligible salary, HRA, rent and city, then combine the period estimates. Do not count the same rent twice.
Does it include home-loan deductions?
No. Use the income-tax calculator to compare regimes with your eligible deductions, and verify eligibility separately. This tool estimates only the HRA component.

Related calculators

Income Tax

Estimate tax under the old and new regimes side by side for FY 2026-27, using the figures you enter.

Take-Home Salary

Turn your CTC into real monthly in-hand pay — with PF, gratuity, professional tax and income tax broken down.

Gratuity

Your gratuity under the 15/26 formula — Act coverage, the service-rounding rule, the ₹20 lakh cap and tax treatment, all handled.

Figures last checked: , against Income-tax Rule 2A (least-of-three). They apply to FY 2026-27. Rates and limits change — verify anything you are about to act on against the official source.

Disclaimer: Eternexa is an independent app. It is not affiliated with, endorsed by, authorised by or representing the Government of India, any state government or any government entity. It does not provide official government services. Results are estimates for general information, not financial, investment, tax or legal advice. Verify the applicable period, eligibility and official rules before acting. Read the official references and calculation scope.