HRA Exemption Calculator
Estimate HRA exemption by financial year and city — old tax regime only
The 50% city list changes by financial year. Current category: 50% eligible.
HRA city limits for FY 2026-27
50% of basic salary
Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad qualify in FY 2026-27. On ₹60,000 of qualifying salary, the 50% condition is ₹30,000/month. With ₹28,000 rent, the rent-minus-10% condition is ₹22,000; actual exemption also depends on HRA received.
Higher cap = more exemption for same rent40% of basic salary
Other cities (e.g. Jaipur, Surat) use the 40% condition. For ₹60,000 of qualifying salary, that condition is ₹24,000/month. Actual exemption is the lowest of the three prescribed amounts.
Lower cap even though rent may be higherThe three-condition minimum formula for HRA exemption
Actual HRA received
The exact amount your employer pays as HRA each month. Check your salary slip — it's listed separately from basic salary and other allowances. This sets the ceiling because you can't claim exemption on more than what you actually receive.
Rent paid minus 10% of qualifying salary
This condition ensures only the "excess" rent gets exemption. If your qualifying salary is ₹50,000 and rent is ₹20,000: the formula gives ₹20,000 − ₹5,000 = ₹15,000. The 10% threshold means very low rent amounts yield zero exemption — you'd need to pay more than 10% of basic to get any benefit.
50% or 40% of qualifying salary
Metro cities get a 50% cap, everyone else gets 40%. The list of cities eligible for the 50% condition changes from four to eight in FY 2026–27. On ₹70,000 qualifying salary: metro cap = ₹35,000, non-metro cap = ₹28,000. The final exemption is whichever of these three conditions gives the lowest number.
HRA exemption does not exist under the new tax regime
If you've opted for the new tax regime (default since FY 2023-24), your entire HRA is taxable. There is no exemption, no deduction, and no workaround. For employees paying high rent, this may affect the comparison with the new tax regime. Run the numbers on both regimes before choosing. The Income Tax calculator on Utilra compares both side by side.
Mistakes that get HRA claims rejected during scrutiny
Missing landlord PAN for rent above ₹1 lakh/year
Employers typically request the landlord's PAN when annual rent exceeds ₹1 lakh. If unavailable, check which declaration and proof your employer requires, and keep accurate payment records.
Paying rent to parents without their ITR disclosure
Rent to family members must be genuine, documented and actually paid. The recipient may have tax-reporting obligations. Keep records and obtain advice for your circumstances.
No rent receipts or invalid revenue stamps
Keep genuine rent receipts or other acceptable payment records. Evidence requirements vary; do not create backdated or inaccurate documents. Check current employer and tax authority guidance.
Frequently Asked Questions
How is HRA exemption calculated?
Under the old tax regime, HRA exemption is the lowest of: actual HRA received; rent paid minus 10% of qualifying salary; and 50% or 40% of qualifying salary depending on the city and tax year. Qualifying salary generally includes basic pay and eligible dearness allowance.
Which cities qualify for the 50% HRA limit?
For FY 2025–26: Delhi, Mumbai, Kolkata and Chennai. From FY 2026–27, Bengaluru, Hyderabad, Pune and Ahmedabad also qualify under the updated Income-tax Rules, 2026. Select the appropriate year above.
Can I claim HRA if I live in my own home?
HRA exemption normally requires actual rent paid for accommodation you occupy. Living in an owned house without rent paid does not qualify. Maintain genuine records of payments.
Is HRA exemption available under the new tax regime?
No. The HRA exemption calculated here applies only when the old tax regime is selected. Compare the overall tax payable under each regime before making a decision.
What records should I keep?
Retain genuine rent receipts, proof of payment and the agreement where available. Employers commonly request the landlord PAN when annual rent exceeds ₹1 lakh. The required evidence and declarations depend on the applicable rules and circumstances.
Key Terms
HRA
House Rent Allowance: an employer-paid salary component for rental accommodation.
Qualifying Salary
Basic salary plus eligible dearness allowance and commission, where relevant under the applicable rule. Enter this amount in the calculator.
50% City
FY 2025–26: Delhi, Mumbai, Kolkata, Chennai. FY 2026–27: those cities plus Bengaluru, Hyderabad, Pune and Ahmedabad.
HRA exemption
The eligible amount under the old tax regime, computed using the lowest of three prescribed limits.
Rent Receipt
Evidence of actual rent paid. Keep supporting records for your claim.