HRA Exemption Calculator
Calculate the HRA portion exempt from income tax under the old regime.
Written by Anil Gautam · Updated
How is the HRA exemption calculated?
The exempt amount is the lowest of three yearly figures: the HRA you received, 50% of basic plus DA in a metro or 40% elsewhere, and rent paid minus 10% of basic plus DA. Your monthly entries are multiplied by 12. With the starting values (basic ₹50,000, HRA ₹20,000, rent ₹18,000, metro), the three figures are ₹2,40,000, ₹3,00,000 and ₹2,16,000 minus ₹60,000, which is ₹1,56,000. The lowest, ₹1,56,000, is exempt and the other ₹84,000 of HRA is taxable.
Rent has to be more than 10% of basic plus DA before anything is exempt. On a ₹50,000 basic, rent of ₹5,000 a month makes the third figure zero, and the whole ₹2,40,000 of HRA stays taxable.
Does paying more rent always increase the exemption?
It does, until another rule becomes the lowest. Your full HRA is exempt once monthly rent reaches your monthly HRA plus 10% of basic, as long as the 50% or 40% figure is not lower. For the defaults that point is ₹20,000 + ₹5,000 = ₹25,000 a month, where the third figure becomes ₹2,40,000 and matches the HRA received. Rent of ₹30,000 changes nothing further, because the exemption can never exceed the HRA actually paid to you.
The metro box matters only when the 50% or 40% rule is the lowest. With basic ₹50,000, HRA ₹25,000 and rent ₹35,000, a metro gives ₹3,00,000 exempt and a non-metro city ₹2,40,000. From FY 2026-27 the Income-tax Rules, 2026 give the 50% limit to eight cities: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. For FY 2025-26 and earlier only the first four qualified, so untick the box for Bengaluru, Hyderabad, Pune or Ahmedabad rent paid before April 2026. Gurugram, Noida and other cities stay at 40% in both years.
What if you paid rent for only part of the year?
The calculator assumes the same salary, HRA and rent for all 12 months. When those stay constant, the exemption scales with the months you paid rent: eight months at the default figures gives 8/12 of ₹1,56,000, or ₹1,04,000. If your rent or salary changed during the year, work out each period separately and add the results.
You can carry the exempt figure into the HRA exemption field of the Income Tax Calculator, which shows whether the old regime still costs less than the new one for your income. The Rent Receipt Generator prepares monthly receipts for a range of months. All calculations run in your browser.