HRA Calculator

If you get House Rent Allowance (HRA) and live in a rented home, part of it can be tax-free under the old tax regime. The exempt amount is the lowest of three numbers, which this calculator works out for you.

The three HRA rules

The tax-free HRA is the lowest of:

1. The HRA you actually receive.
2. Rent paid minus 10% of your salary (basic + DA).
3. 50% of salary if you live in one of the 8 big cities, or 40% anywhere else.

Which cities get 50%?

From FY 2026-27, under the Income-tax Rules, 2026, eight cities qualify for the 50% limit: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Earlier, only the first four did. All other cities use 40%.

How to use the HRA calculator

1. Enter your monthly basic salary + DA.
2. Enter the HRA you receive every month.
3. Enter the rent you pay every month.
4. Choose your city.

Example

Your basic + DA is ₹50,000 a month, you get ₹20,000 HRA, you pay ₹18,000 rent, and you live in Pune.

• Rule 1, HRA received: ₹2,40,000 a year
• Rule 2, rent minus 10% of salary: ₹2,16,000 − ₹60,000 = ₹1,56,000
• Rule 3, 50% of salary: ₹3,00,000
• Tax-free HRA = ₹1,56,000 (the lowest)
• Taxable HRA = ₹84,000

Paying a little more rent, up to ₹25,000 a month, would make the full ₹2,40,000 tax-free in this case.

Things to know

• Old regime only. The new regime does not allow the HRA exemption. Compare both with the income tax calculator.
• Keep rent receipts and a rent agreement. If your rent is more than ₹1 lakh a year, your employer needs your landlord's PAN.
• Paying rent to parents is allowed if you really pay it and they declare it as income.
• No HRA but paying rent? Self-employed people and those without HRA may claim a separate, smaller deduction under the old regime.