House Rent Allowance is only partly exempt — the rest is taxed. Enter your salary, rent and city to see exactly how much you can claim under the old regime.
House Rent Allowance (HRA) is a part of many salary packages. If you live in rented accommodation, a portion of your HRA can be exempt from tax — but only under the old tax regime. The catch is that only part of it is usually exempt, and the rest is taxable.
Your exempt HRA is the smallest of these three amounts:
For example, if your Basic + DA is ₹50,000 a month, you receive ₹20,000 HRA, and you pay ₹18,000 rent in a metro: the three figures are ₹20,000, ₹25,000 and ₹13,000. The smallest is ₹13,000, so that is your monthly exemption — and the remaining ₹7,000 of HRA is taxable. The calculator above highlights which of the three is your limit, so you can see exactly why.
These are estimates for the standard case. For unusual situations it is best to confirm with a chartered accountant.
Your exempt HRA is the least of three amounts: the actual HRA you receive, 50% of your salary if you live in a metro (40% if non metro), and the rent you pay minus 10% of your salary. Here salary means Basic pay plus Dearness Allowance. Whatever is smallest is your tax free HRA; the rest is taxable.
Only Delhi, Mumbai, Kolkata and Chennai are treated as metro cities for HRA, where the limit is 50% of salary. All other cities, including places like Bengaluru, Hyderabad and Pune, are non metro at 40%.
No. The HRA exemption is only available under the old tax regime. If you opt for the new regime, your entire HRA is taxable, so this calculator is relevant when you are choosing or using the old regime.
Yes, if you genuinely pay rent to a parent who owns the home and it is a real arrangement. Keep proof such as rent receipts and bank transfers, and note that the rent your parent receives is taxable in their hands.
Then HRA exemption does not apply, but you may be able to claim a deduction under Section 80GG instead, subject to its own limits. This calculator covers the standard HRA exemption for people who receive HRA as part of their salary.